Harley sees stock sink after warning Wall Street of steeper competition, missing estimates

Harley-Davidson said motorcycle shipments for 2016 fell short of its estimates, citing tough global competition, and the company forecast shipments for this year to be flat to down modestly.

The Milwaukee-based company’s shares were down nearly 4 percent at $ 55.65 in premarket trading on Tuesday.

Harley, which commands about half the U.S. big-bike market, said it expects first-quarter 2017 shipments to drop 20.5-14.5 percent or 66,000-71,000 motorcycles. The company shipped 83,036 units in the year-ago quarter.

Shipments have been hurt as foreign competitors such as Japan’s Honda Motor and Indian motorcycle maker Polaris Industries have cut prices to entice new buyers.

Harley’s rivals also include Kawasaki Heavy Industries, as well as Germany’s Bayerische Motoren Werke

The company is also seeing slowing demand for motorcycles in the United States, its biggest market, as many Americans choose to spend their disposable income on automobiles, rather than motorcycles.

Harley shipped 262,221 motorcycles in 2016, below its expectation of 264,000-269,000 units.

Shipments fell 11.9 percent to 42,414 units in the fourth-quarter ended Dec. 31.

Retail sales in the United States, where its core baby boomer demographic is aging, were flat in the quarter compared with a year earlier.

The motorcycle maker’s net income rose to $ 47.18 million, or 27 cents per share, from $ 42.2 million, or 22 cents per share.

Revenue from motorcycles and related products fell to $ 933 million from $ 1.01 billion.

Analysts on average had expected earnings of 31 cents per share and revenue of $ 972.5 million, according to Thomson Reuters.

Harley said it repurchased 1.7 million shares of its common stock during the fourth quarter at a cost of $ 91 million.

At the end of 2016, the company had 19.3 million shares remaining on a board-approved share repurchase authorization.

Up to Monday’s close, Harley’s shares had risen about 44 percent in the past 12 months, compared with a 16.7 percent increase in the Dow Jones U.S. Automobiles index.

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Craig Ballantyne

I love anything to do with Harley Davidson and have two beautiful children and a beautiful partner. In my spare time i like building websites and love anything to do with the internet.

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