MILWAUKEE (AP) — Harley-Davidson Inc. said Friday its fourth-quarter profit tumbled 26.3 percent due to slumping U.S. motorcycle sales amid a weakening economy.
CEO Jim Ziemer called the retail environment "challenging" for this year. The company expects moderate growth in both earnings per share and revenue, however. Analysts expected slightly lower revenue and higher earnings in 2008.
"Consumer confidence is low, and housing and credit issues persist," he told analysts on a conference call. "All this adds up to a weak retail sales environment for major discretionary purchases, including our motorcycles."
Its shares fell 5 percent in midmorning trading Friday after rising that much earlier in the session.
Milwaukee-based Harley said its profit for the quarter ended Dec. 31 totaled $186.1 million, or 78 cents per share, compared with a profit of $252.4 million, or 97 cents per share, a year ago. Revenue dropped 7.7 percent to $1.39 billion from $1.50 billion in the period.

Analysts had expected a profit of 82 cents per share on revenue of $1.34 billion, according to a poll by Thomson Financial. The earnings estimates typically exclude one-time items.
Worldwide retail sales of Harley-Davidson motorcycles were down 6.1 percent in the quarter, and 14.2 percent in the U.S. The company said the domestic heavyweight motorcycle market was down 9 percent in the quarter. Overseas, Harley's sales were up 17.4 percent.
Harley's shipments were down 12.5 percent to 81,206 units, a drop of 11,642 units.
For the year, profit fell to $933.8 million, or $3.74 a share, from $1.04 billion, or $3.93 a share, in 2006. Revenue slipped 1.3 percent to $5.73 billion from $5.8 billion in 2006.
Worldwide sales fell 1.8 percent in 2007, while U.S. sales were down 6.2 percent. The overall heavyweight market was down 5 percent for the year, Harley said. Internationally, Harley's sales finished the year up 13.7 percent.
Shipments for the year were down 5.3 percent to 330,619 motorcycle units, from 349,196 bikes in 2006. Harley-Davidson cut its bike shipments in the wake of expected falling sales and even idled its plants for a week in November.
First quarter shipments are expected to be between 68,000 and 72,000 bikes, compared to 67,761 units in the first quarter of 2007. But last year's first quarter shipments were down 14.8 percent because of a three-week strike at the company's largest plant, in York, Pa.
Ziemer said Harley will monitor its wholesale shipments throughout the year. The company had a "dreadful" view of the fourth quarter, he said, and the outlook is cautious for 2008.
But even with those expectations, Harley-Davidson said it expects moderate revenue growth and earnings per share growth of between 4 and 7 percent this year compared to 2007.
But analysts are expecting a drop in revenue to $5.6 billion for 2008 and earnings per share of $3.79, according to a poll by Thomson Financial.
Citigroup analyst Greg Badishkanian said in a research note the company's guidance may be "overly optimistic" given the recent declines.
Its shares fell $2.12, or 5.2 percent, to $38 in midmorning trading after rising as high as $42.45 earlier in the day.
The company bought back 20.4 million shares of its stock in 2007 at a cost of $1.15 billion.

 

JUST RIDE AND ENJOY!!!

 

I listened to the conference call. The CFO noted that used bike prices have stabilized in the second half of 2007 and demand for used HDs was up 8% for the year,new bike demand is down. HD said many people are chosing to buy used then new in light of the slower ecconomy.

 

Looks like the stock market isn't taking the financial report very well.

HOG stock is currentlydown to$38.51 a share. [8D]