MILWAUKEE, Oct. 19, 2010 -- Harley-Davidson, Inc. (NYSE: HOG) reported third-quarter 2010 income from continuing operations of $93.7 million, or $0.40 per share, compared to income of $56.4 million and earnings per share of $0.24 from continuing operations in the year-ago quarter.
The Company’s third-quarter earnings were driven by continued improvement at the Company’s financial services unit, Harley-Davidson Financial Services (HDFS), as the Company recorded operating income from financial services of $50.9 million, compared to a loss of $31.5 million in last year’s third quarter. Operating income from the motorcycles and related products segment was $101.5 million, compared to $130.7 million in the year-ago period.
Retails sales of new Harley-Davidson motorcycles decreased 7.7 percent worldwide in the third quarter, with a 9.4 percent drop in the U.S. and 3.6 percent in international markets compared to the year-ago period.
“Despite the continued challenges in the economy, we are making solid, steady progress at our business,” said Keith Wandell, President and Chief Executive Officer of Harley-Davidson, Inc. “With our strategic focus on future growth initiatives and continuous improvement, we are positioning Harley-Davidson to succeed at today’s volumes".
Retail Harley-Davidson Motorcycle Sales
Industry-wide U.S. heavyweight motorcycle (651cc-plus) retail unit sales decreased 14.4 percent in the third quarter compared to the year-ago period.
Through nine months, worldwide retail sales of Harley-Davidson motorcycles decreased 9.8 percent compared to the same period last year. U.S. retail sales of Harley-Davidson motorcycles decreased 13.4 percent for the first nine months of the year while the U.S. heavyweight market segment was down 14.6 percent for the same period, compared to the year-ago period. In international markets, retail sales of new Harley-Davidson motorcycles decreased 1.9 percent for the first nine months of 2010 compared to 2009. Third-quarter-and nine-month data are listed in the accompanying tables.
Harley-Davidson Motorcycles and Related Products Segment Financial Results
Third Quarter: Revenue from Harley-Davidson motorcycles in the third quarter of 2010 was $798.8 million, down 0.6 percent from last year. The Company shipped 53,293 Harley motorcycles worldwide during the quarter, compared to 54,236 motorcycles in the third quarter of 2009.
Restructuring Update
Last month, Harley-Davidson announced that its Wisconsin labor unions had ratified new labor agreements to take effect in April 2012. Costs and savings related to the new Wisconsin labor agreements are included in the restructuring projections, and savings will first result in a financial benefit upon implementation of the agreements in 2012.
Discontinued Operations
In the third quarter, the Company completed the divesture of its MV Agusta subsidiary. For the third quarter of 2010, Harley-Davidson incurred a $4.9 million loss from discontinued operations, net of tax. Through the first nine months of 2010, Harley-Davidson incurred a $108.4 million loss net of tax from discontinued operations, comprised of operating losses as well as fair value adjustments. Including discontinued operations, the Company reported earnings per share of $0.38 in the third quarter of 2010.
Company Background
Harley-Davidson, Inc. is the parent company for the group of companies doing business as Harley-Davidson Motor Company (HDMC), Harley-Davidson Financial Services (HDFS) and Buell Motorcycle Company (Buell).