Harley-Davidson 1Q earnings jump 18.7 per cent as motorcycle sales rise, efficiencies take hold

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MILWAUKEE – Harley-Davidson reported an 18.7 per cent rise in first-quarter earnings, saying motorcycle sales grew 5.8 per cent worldwide and efficiency efforts took hold during the quarter.

The results beat Wall Street estimates and its shares rose nearly 7 per cent.

The company posted net income of $265.9 million on Tuesday, up from $224.1 million a year ago.

That’s $1.21 per share, compared with 99 cents in the first quarter of 2013. Analysts polled by FactSet expected earnings of $1.07 per share.

Motorcycle and related products revenue rose 11 per cent to $1.57 billion. Overall revenue including financial services rose to $1.73 billion from $1.57 billion.

Motorcycle sales grew 3 per cent in the U.S. to 35,730 during the quarter despite a long, cold winter, CEO Keith Wandell said in a statement.

But international sales, especially in Asia, helped the first-quarter results. Harley said Asia-Pacific motorcycle sales rose more than 20 per cent to 7,178 for the quarter. In the Europe, Middle East and Africa region, sales were up 8 per cent to 9,940, while they rose 9 per cent in Latin America to 2,558.

The company said demand for its Project Rushmore motorcycles was high during the quarter, and it also started shipping the Harley-Davidson Street 750 and 500 models in selected markets.

“These motorcycles, together with continuous improvement in our operations at every level, underscore the momentum we’ve established as a customer-led company,” Wandell’s statement said.

Harley reiterated guidance of growing motorcycle shipments this year, up 7 per cent to 9 per cent to a range of 279,000 to 284,000. The company expects second-quarter shipments to rise 9 per cent to 15 per cent to a range of 92,000 to 97,000, up from 84,606 a year earlier.

Harley expects capital spending this year of $215 million to $235 million, the same as it estimated when it reported fourth-quarter earnings.

The company reported provisions for higher credit losses cut operating income for its financial services operation. That income was $63.2 million, down almost 12 per cent from a year earlier.

Its shares rose $4.63, or 6.8 per cent, to $72.17 in afternoon trading. Its shares have risen more than 40 per cent over the past year.

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