Canadian Bikers, Motorcycle Canada, Belt Drive Betty

We've recently upgraded and are working on the site. If you see a problem, please let us know at This email address is being protected from spambots. You need JavaScript enabled to view it.

Funnyheehee
Rider FriendlyBusiness Association
- RFBA Special Offers
- International
- Canada
  British Columbia
  
  Alberta
  
  Saskatchwan
  
  Manitoba
  
  Ontario
  
  Quebec
  
  New Brunswick
  
  Nova Scotia
  
  Prince Edward Island
  
  Newfoundland & Labrador
  
  Yukon
  
  Northwest Territories
- BC Events
- AB Events
- SK Events
- MB Events
- ON Events
- QC Events
- NB Events
- PEI Events
- NS Events
- NL Events
- YT Events
- NWT Events
- SUBMIT your event
ClassifiedsSell your bike
Canada's Rider Powered News

Unlock your Belt Drive Betty Patch at BikerGeo!

Belt Drive Betty

Serving the Canadian Motorcycle Community Since 2003. News, Events, Travel and so much more! If gettin' in the wind is what turns your crank, Belt Drive Betty has something for you.

Harley: Ride it or park it?

By Glenn Curtis

Shares of Harley Davidson are more than 60% off their 52-week high, and the company recently released some disappointing news regarding shipment expectations. Is this the time to buck up and buy the stock for the long-term, or to put down the kickstand and hop off?

IN PICTURES: Eight Ways To Survive A Market Downturn

The Glass Half-Full Assessment
Harley really needs no introduction does it? After all its cycles are almost works of art, and many collectors seem to love the product they put out. When the economy rebounds, which I believe it eventually will, I think its products could sell very well.

In addition, because the company is still expected to generate fairly sizable profits, given the operating environment, the shares deserve more than a passing glance. Analysts expect the company to earn $1.23 a share this year, and $1.56 per share in 2010.

The Glass Half-Empty Assessment
This past week was a busy one on the earnings front. For example, JP Morgan Chase (NYSE:JPM) turned in better-than-expected earnings results on Thursday, and many in the investment community gravitated toward that release and pondered the potential implications for other financials and/or the larger economy. That release and others seemed to draw attention away from Harley's second-quarter release, which was disseminated this past Thursday.

In the period ended June 28, the company reported an 8-cent profit. An AP article reported the following: "The results included two non-cash charges related to the company's motorcycle financing division. The company did not provide results excluding those charges, but Deutsche Bank analyst Rod Lache said adjusted earnings came to 27 cents per share."

The good news is that analysts had been expecting earnings of 24 cents. However, be sure to take a look at the top line. In the quarter, revenue came in at about $1.15 billion, which looked to be in line with expectations. However, the number was down sharply from the $1.57 billion it generated in the comparable period last year. In addition, the release also reported that Harley "lowered its 2009 shipment expectations for Harley-Davidson motorcycles. The Company now plans to ship between 212,000 and 228,000 Harley-Davidson motorcycles to dealers and distributors worldwide in 2009, or 25 percent to 30 percent fewer than the 303,479 shipped in 2008. Prior 2009 guidance was for shipments of 264,000 to 273,000 motorcycles." This speaks for itself, and I think it's a disappointment.

Future Outlook
I am also not too confident that the company will be able to meet the current 2009 estimate, which is currently $1.23. In fact, I think the estimate might even be adjusted down.

Given the state of the economy, I don't think that Harley's difficulties are too much of a surprise, and the company doesn't seem to be alone in its struggles. Off-road vehicle company Polaris (NYSE:PII) is coming off a lackluster second quarter, and Minnesota-based ATV and snowmobile company Arctic Cat (Nasdaq:ACAT) is coming off a fourth-quarter loss, and is expected to lose money in the first quarter. Whatever the case, I do think the Harley news and its lack of positive punch will cause some potential retail and institutional investors to take a wait-and-see approach.

Bottom Line
I am not saying that Harley can't get its motor revving in high gear at some point, but in the interim, the lackluster shipment expectation information, and the overall economy makes me think I'd be better off on the sidelines. (For more, check out Strategies For Quarterly Earnings Season.)

Source: http://stocks.investopedia.com/stock-analysis/2009/Harley-Ride-It-Or-Park-It--HOG0723.aspx?printable=1