Harley-Davidson Inc (NYSE:HOG) announced better-than-expected second-quarter earnings in spite of the looming trade war, reaffirming its shipping guidance.
The motorcycle manufacturer reported earnings of US$1.45 per share on revenue of US$1.53bn compared with US$1.48 EPS on revenue of US$1.57bn in the previous year’s second quarter.
The Wisconsin-based company beat Wall Street estimates of US$1.34 EPS on revenue of $1.42bn.
A total of 78,428 motorcycles were sold worldwide in this second quarter, a nearly 4% decrease compared with the 81,388 sold in the previous second quarter.
For the year ahead, the company expects to ship between 231,000 and 236,000 motorcycles.
Tariffs take their toll
The company has lowered its profit guidance for the year, expecting its operating margin to be 9% to 10% compared with its prior guidance of 9.5% to 10.5%.
Harley Davidson was faced with tariffs from the European Union after the US imposed 25% tariffs on non-American steel and aluminum products.
READ: Trump’s Trade War: Who’s in the firing line?
Harley forecast that the EU tariffs would cost the company about US$30mln to US$45mln this year and between US$90mln and US$100mln on a full-year basis, as per a Reuters report.
As a result, the company announced that some of its manufacturing operations would be moving overseas with further details to come by July 30.
The decision elicited a strong reaction from President Trump, who threatened that the company would be “taxed like never before,” via Twitter.
While the President has yet to follow through, fewer motorcycles were shipped globally.
Shares of the Milwaukee-based company were up more than 3% to US$42.73 in Tuesday pre-market trading.