Harley-Davidson (HOG) Misses Q2 Earnings Estimates, Cuts View
Harley-Davidson, Inc. HOG reported second-quarter 2023 adjusted earnings of $1.22 per share, which missed the Zacks Consensus Estimate of $1.40 and declined 16% year over year. Lower-than-anticipated revenues from the Motorcycles & Related Products primarily resulted in the underperformance. The motorcycle manufacturer generated consolidated revenues (including motorcycle sales and financial services revenues) of $1,446 million, down 2% from the prior-year quarter.
HOG currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Harley-Davidson, Inc. Price, Consensus and EPS Surprise
Harley-Davidson, Inc. price-consensus-eps-surprise-chart | Harley-Davidson, Inc. Quote
Segmental Highlights
Harley-Davidson Motor Company: Total revenues from the Motorcycle and Related Products segment, which constitute the bulk of the firm’s overall revenues, decreased 4% on a year-over-year basis to $1,198 million and missed our forecast of $1,325.5 million on lower-than-expected motorcycle shipments. The operating income for the segment decreased to $194 million from $211 million in the corresponding quarter of 2022 and lagged the Zacks Consensus Estimate of $235.6 million.
In the quarter under review, revenues from the sale of motorcycles came in at $891 million, down 4% year over year. The company’s global shipments came in at 42,900 motorcycles, down 10%.
During the reported quarter, Harley-Davidson retailed 51,500 motorcycle units globally, up 3% year over year. Its retail motorcycle units sold in North America increased 1% to 35,100. Meanwhile, sales in EMEA or Europe, the Middle East and Africa declined 6% year over. Sales in the Asia Pacific and Latin America were up 24% and 4%, respectively.
Revenues for parts & accessories were up 1% from a year ago to $216 million and topped our estimate of $213.5 million. Revenues from apparel tailed off 14% year over year to $66 million and missed our projection of $81 million.
Harley-Davidson Financial Services: Revenues for Harley-Davidson Financial Services totaled $240 million, up 19% year over year, and crossed our forecast of $201 million. Operating income declined 31% to $59 million and missed our estimate of $66.7 million.
LiveWire: During the reported quarter, the total shipment for LiveWire was 33 units, down 85% compared with the year-ago quarter levels. Revenues declined 44% to $7 million. Operating loss widened from $19 million to $32 million. The reported loss was slightly wider than our projection of $29 million.
Financial Position
In the second quarter, selling, general and administrative expenses from the HDMC unit increased to $223.1 million from $176.4 million in the year-ago quarter. The company paid dividends of 16.50 cents per share in the reported quarter.
Harley-Davidson had cash and cash equivalents of $1.52 billion as of Jun 30, 2023, up from $1.43 billion as of Dec 31, 2022. In the same period, the long-term debt increased to $5,765 million from $4,457 million recorded on Dec 31, 2022.
2023 Guidance
For 2023, the company expects revenues from HDMC to be flat to up 3%, down from the previous projection of 4-7% growth. The operating income margin expectation for the motorcycles segment is in the range of 13.9% to 14.3%, down from 14.1-14.6% guided earlier. HOG expects its operating income for Financial Services to decline 20-25%. For the LiveWire segment, motorcycle wholesale units are expected to be in the range of 600-1,000. Operating loss for the segment is anticipated to be in the range of $115-$125 million. Capital expenditure projection for the full year is estimated to be in the range of $225-$250 million.
Key Releases From the Auto Space
Tesla TSLA reported second-quarter 2023 earnings of 91 cents per share, which rose from the year-ago figure of 76 cents and outpaced the Zacks Consensus Estimate of 83 cents. This marked the 10th consecutive earnings beat for this electric vehicle behemoth. Record deliveries and revenues, which topped expectations, resulted in this outperformance. Total revenues came in at $24,927 million, witnessing year-over-year growth of 47%. The top line exceeded the consensus mark of $24,884 million.
Tesla had cash and cash equivalents of $23,075 million as of Jun 30, 2023 compared with $22,402 million on Mar 31, 2023. Net cash provided by operating activities amounted to $3,065 million in second-quarter 2023. Capital expenditure totaled $2,060 million in the quarter under review.
General Motors GM reported second-quarter 2023 adjusted earnings of $1.91 per share, which surpassed the Zacks Consensus Estimate of $1.73. The outperformance can be primarily attributed to better-than-expected results from the North America market. The bottom line also rose from the year-ago quarter’s earnings of $1.14 per share. Revenues of $44,746 million beat the Zacks Consensus Estimate of $42,478 million and increased from $35,759 million recorded in the year-ago period.
General Motors had cash and cash equivalents of $23,074 million as of Jun 30, 2023, compared with $19,153 million as of Dec 31, 2022. The long-term automotive debt at the end of the quarter was $15,976 million compared with $15,885 million as of Dec 31, 2022.
AutoNation AN reported second-quarter 2023 adjusted earnings of $6.29 per share, which decreased 2.9% year over year but topped the Zacks Consensus Estimate of $5.83. This outperformance can be primarily attributed to higher-than-expected new vehicle revenues and profits. In the reported quarter, revenues amounted to $6,890.1 million, surpassing the Zacks Consensus Estimate of $6,645 million. The company had recorded revenues of $6,869.2 million in the second quarter of 2022.
AutoNation’s cash and cash equivalents were $63.7 million as of Jun 30, 2023, declining from $72.6 million recorded as of Dec 31, 2022. The company’s liquidity was $1.4 billion, including $64 million in cash and nearly $1.3 billion available under its revolving credit facility.
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