On Jun 6, 2014, we issued an updated research report on Harley-Davidson, Inc. (NYSE: HOG). This Zacks Rank #3 (Hold) stock reported positive earnings surprises in the trailing four quarters with an average beat of 4.97%.
Harley-Davidson posted a 22.2% year-over-year rise in earnings to $1.21 per share in the first quarter of 2014 from 99 cents in the year-ago quarter. Earnings topped the Zacks Consensus Estimate of $1.08. The year-over-year increase was due to improved motorcycle shipments and enhanced operating efficiencies.
Consolidated revenues improved 10.2% to $1.73 billion, surpassing the Zacks Consensus Estimate of $1.52 billion. Operating income rose 18% to $410.9 million from $348.3 million in the first quarter of 2013.
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Harley-Davidson enjoys a significant market share in the U.S. motorcycle market. The company's sales are rising and efficient capital deployment is boosting shareholder value. Moreover, the company is expanding its product portfolio to increase its customer base, while restructuring activities have reduced costs significantly.
However, the operating income of Harley-Davidson Financial Services has been declining and the outlook for 2014 is also unfavorable due to higher credit losses and contracting net interest margins. Moreover, we are concerned about the aging customer base, expensive products and strong competition faced by the company.
Harley-Davidson currently carries a Zacks Rank #4 (Sell). Some better-ranked automobile stocks worth considering are Fox Factory Holding Corp (NASDAQ: FOXF), Gentherm Incorporated (NASDAQ: THRM) and Magna International Inc. (NYSE: MGA). Fox Factory and Gentherm carry a Zacks Rank #1 (Strong Buy), while Magna is a Zacks Rank #2 (Buy) stock.
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HARLEY-DAVIDSON (NYSE: HOG): Free Stock Analysis Report
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