Harley-Davidson, Inc. HOG reported third-quarter 2022 adjusted earnings of $1.78 per share, beating the Zacks Consensus Estimate of $1.45. Higher-than-anticipated revenues from the Motorcycles & Related Products and Financial Services segments resulted in this outperformance. The bottom line also shot up 70% from $1.05 per share reported in the year-ago quarter.
The motorcycle manufacturer generated consolidated revenues (including motorcycle sales and financial services revenues) of $1,649 million, rising 21% from the year-earlier quarter.
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HarleyDavidson, Inc. Price, Consensus and EPS Surprise
HarleyDavidson, Inc. price-consensus-eps-surprise-chart | HarleyDavidson, Inc. Quote
Motorcycles and Related Products: Total revenues from the Motorcycle and Related products segment, which constitute the bulk of the firm’s overall revenues, increased 24% on a year-over-year basis and came in at $1,437 million. The figure also outpaced the consensus mark of $1,327 million. The operating income from the segment skyrocketed 164% to $258 million and surpassed the Zacks Consensus Estimate of $179 million.
In the quarter under review, revenues from the sale of motorcycles came in at $1,134 million, rising 28% year over year and crossing the consensus mark of $1,002 million. The company’s global shipments came at 57,061 motorcycles, growing 19%.
During the reported quarter, Harley-Davidson retailed 49,604 motorcycle units globally, down 2% year over year. Its retail motorcycle units sold in North America declined 5% to 32,154. Meanwhile, sales in the EMEA (Europe, Middle East and Africa) and Latin America decreased 4% and 27%, respectively, while that in the Asia Pacific increased 18%.
Revenues for Parts & Accessories were down 2% from a year ago to $201 million and missed the consensus mark of $217 million. Revenues from Apparel went up 41% from the prior-year quarter to $70 million and crossed the consensus mark of $60 million.
Financial Services: Revenues for Harley-Davidson Financial Services totaled $212 million, up 3% year over year and crossed the consensus mark of $208 million. Operating income declined 24% to $81 million and missed the consensus mark of $98 million.
In the third quarter, selling, general and administrative expenses increased 9.6% to $232.5 million from $212.2 million in the year-ago quarter. The firm generated $331 million of cash from operating activities. The company paid dividends of 15.75 cents per share in the reported quarter. It repurchased $12 million in shares in the quarter.
Harley-Davidson had cash and cash equivalents of $1,730.2 million as of Sep 25, 2022, significantly down from the $2,061.3 million as of Sep 26, 2021. In the same period, the long-term debt decreased to $4,738.2 million from $4,876.3 million recorded as of Sep 26, 2021.
For 2022, the company has restated its previous guidance and projections for revenues and operating income. It continues to expect revenues from the motorcycles segment to grow in the band of 5-10% for the current year. Harley-Davidson has also kept the operating income margin expectation for the segment intact at 11-12%. HOG still expects its operating income for Financial Services to decline 20-25%. Capital expenditure projection for the full year has been brought down to the range of $170-$190 million from the previously guided range of $190-$220 million.
Zacks Rank & Other Key Picks
HOG currently has a Zacks Rank #2 (Buy).
Some other top-ranked players in the auto space are Cummins Inc. CMI, CarParts.com PRTS and Genuine Parts Company GPC, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Cummins has an expected earnings growth rate of 18.4% for the current year. The Zacks Consensus Estimate for CMI’s current-year earnings has been revised 1% upward in the past 30 days.
CarParts has an expected earnings growth rate of 45% for the current year. The Zacks Consensus Estimate for current-year earnings has remained constant over the past 30 days.
Genuine Parts has an expected earnings growth rate of 18.4% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 2.7% downward over the past 30 days.
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