Harley-Davidson (NYSE:HOG), the iconic motorcycle maker, posted a drop in first-quarter profits due to a slowdown in sales, but managed to surpass Wall Street analysts’ expectations.
Shares of Harley Davidson rose 3.6% to US$41.01 in pre-market trade after the company reported that its net income for the first three months of 2018 came to US$174.8mln or US$1.03 per share. Those figures were lower than a year ago, when Harley’s net income came to US$186.4mln or US$1.05 per share.
But Harley handily beat the consensus estimate among analysts who had projected that Harley would earn $1.01 per share on sales of US$1.27bln.
Its revenue in the first quarter came to US$1.36bln, up from US$1.33bln in the year-ago quarter as Harley added new international dealers as well as new boutiques in China and India.
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While Harley did well overseas and saw international motorcycle sales inch up 0.2% in the first quarter, sales to US retailers fell by 12% from last year.
Harley Davidson continues to expect restructuring and consolidation costs related to shifting its motorcycle assembly plant in Kansas City, Missouri to one in York, Pennsylvania of US$170mln to US$200mln. In the first quarter, costs related to the manufacturing restructuring came to US$47.6mln.
Harley expects savings from the restructuring to amount to US$65mln to US$75mln after 2020 and says its motorcycle shipments will fall between 231,000 to 236,000 this year.
Harley added to its Sportster motorcycle line in the first quarter, with the introduction of its Iron 1200 and Forty-Eight Special models.