U.S. Markets closed
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Earnings: Harley-Davidson surprises with profit beat, Take-Two posts mixed report, Chegg beats

In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Yahoo Finance's Julie Hyman and Brian Sozzi discuss quarterly earnings for Harley Davidson, Take-Two Interactive, and Chegg.

Video Transcript

JULIE HYMAN: Harley-Davidson is one of them. Surprise profit for Harley-Davidson, and the shares are up by 7.5%, adjusted profit $0.15 a share. Had a $0.44 loss a year earlier, and analysts had been looking for a loss as well. Revenue from motorcycles and related products $816 million. I mean, basically, Sozz, we have seen a pretty sizable turnaround for Harley-Davidson.

BRIAN SOZZI: It is a different company. And we've talked with new CEO Jochen Zeitz back in December. We talked to him December when they announced the spin-off of their electric vehicle operations. You did get the sense that the company continues to look for areas to cut costs.

Now, I do not see those cost cuts per se typed in into the company's outlook for this year, looking for revenue growth of 5% to 10%, operating income to fall 20%, 25%. It looks like they're cutting back a little bit on CapEx but still the stock this morning looks to be trading off one, that revenue growth number in this most recent quarter up 40%. Now, that is not a number you have historically seen from the likes of Harley-Davidson, reflects I think a more streamlined portfolio from the company.

Also number two, sales in the North America market up 8%. Obviously, North America remains the key driver of Harley-Davidson's business. So to see sales up there 8%, while seeing some pressure overseas, I think the market likes that as well.

JULIE HYMAN: Yeah, definitely. So it's not just obviously not just a cost-cutting story. It's also a getting the portfolio right and selling more bikes too. So not-- definitely good news for the company.

Let's also talk about Take-Two this morning and that company's numbers. Net bookings is something that gets attention at something like a video game maker. And net bookings came in short of Wall Street estimates, it was $866 million, just short of what analysts have been looking for.

The company's forecast for net bookings in the current quarter is also below what analysts have been looking for. So that not helping matters and that $866 million of revenue, overall missing estimates. Earnings per share beating estimates but also you know, it's a pressure-cooker kind of video game market right now, Sozz. I mean, yes, Take-Two is buying Zynga, that's expected to close in its fiscal first quarter, which I believe is going to be early next year if I've got their fiscal years right.

BRIAN SOZZI: You got it. You got it.

JULIE HYMAN: But even so you know, Take-Two is still-- I mean, it's just such a competitive market right now.

BRIAN SOZZI: Yeah, just looking at some of the analyst notes, Julie, that have hit the wires off of this quarter, looks to be some Grand Theft Auto fatigue, at least that's I think is one of the Street's takeaways after that earnings call last night with Take-Two. But look, there are positives here, you have NBA 2K22, they sold 8 million units in the most recent quarter, that is very impressive here. Overall bookings are still growing just like just what you mentioned, Julie, just not living up to market estimates here.

JULIE HYMAN: Yeah. Although some of the analyst commentary this morning is still pretty positive, that this is sort of a temporary setback if you will, for the company. So we'll have to see what happens here when it comes to Take-Two.

And then also we are going to be looking at Chegg. Chegg is the--

BRIAN SOZZI: Love that name.

JULIE HYMAN: --one-time-- well, I guess, there's still a textbook publisher, right? But they also do more than that now, now that a lot of textbooks have gone beyond just the physical textbook and have gone online. But the company coming out as you can see there, with numbers beating estimates.

And the company's forecasting their first-quarter numbers ahead of estimates too. Both revenue and EBITDA for the first quarter going to be ahead of what analysts have been looking for. And basically, it looks like expectations were running pretty low into this report. And so coming in better than expected was a relief to the Street and the shares are up 6.5%, Sozz.

BRIAN SOZZI: A little bit of a-- I think a lot of folks on the Street are breathing a sigh of relief. It was just I believe three months ago where the stock was absolutely obliterated to shreds after the company's most recent quarter. So Chegg coming out here, seeing some strength in the services, seeing some upside in sales and operating profits. The Street is loving all of it.

JULIE HYMAN: Yeah, it looks that way, definitely as you say on the back of some pretty lousy performance going into this.