Jul 16, 2009, 4:42 p.
By Shawn Langlois, MarketWatch
SAN FRANCISCO (MarketWatch) -- Harley-Davidson Inc. on Thursday reported a 91% plunge in second-quarter profit and announced another 1,000 job cuts as fewer motorcycle shipments and charges related to its financial services division slammed results.
The Milwaukee-based motorcycle maker said it earned $19.8 million, or 8 cents a share, compared with $222.8 million, or 95 cents a share, a year ago. The most recent quarter included $101.1 million in write-downs and charges.
Harley Cuts Back After Profit Tumbles
Motorcycle maker Harley Davidson on Thursday reported a deep drop in profit, laid off workers and cut back production plans. The company says it is ready for a rebound when the recession ends. (July 17)
Revenue fell 27% to $1.15 billion from $1.57 billion.
Analysts surveyed by FactSet Research had expected Harley-Davidson to earn, on average, 26 cents a share on $1.15 billion in sales.
Robin Diedrich, an analyst at Edward Jones, said that while she initially was looking for a negative reaction, investors likely bought into the stock on the belief that the worst has passed.
"Harley is taking a big swipe on the cost side and people probably see these as necessary moves in this harsh reality," she said. "It can't get a whole lot worse."
Harley /quotes/comstock/13*!hog/quotes/nls/hog (HOG 18.96, +1.47, +8.40%) stock, which has almost been chopped in half in the past year, gained 8.4% to finish at to $18.96. Read First Take.
Worldwide retail-unit sales of new Harley motorcycles fell 30% from the year-earlier quarter. That reflected declines of 35% in the U.S. and 18% internationally, Harley-Davidson reported.
The company also lowered its 2009 expectations for shipments, now planning to ship 212,000 to 228,000 motorcycles to dealers and distributors worldwide this year. The prior estimate was 264,000 to 273,000. HOG 18.96, +1.47, +8.40%
Harley also said it will cut 700 more hourly jobs and 300 more non-production positions. Earlier this year, the company had announced workforce reductions of about 1,400 to 1,500 hourly positions and about 300 non-production jobs.
The company finished 2008 with 10,100 employees.
"While our current challenges are substantial, so are our unique strengths and if those strengths are properly put to work, through the right long-term strategy, we have a long conviction that we can indeed operate as a competitive, growing business as the economy strengthens," CEO Keith Wandell said in a conference call.
Shawn Langlois is a reporter for MarketWatch in San Francisco.
NB: Warren Buffett has a debt holding in Harley Davison bought earlier in the year.Share Investor Blog - Stockmarket & Business commentary
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