Harley Davidson Rumbles To An Earnings Beat

Harley Davidson's

beat second-quarter earnings expectations on a 30% net income surge and held firm to 2012 targets amid continued increases in global motorcycle demand. Retail sales of new HD bikes rose 2.8% globally in the quarter. That included a 4% unit sales increase in the U.S. The company said that sales moderated in the quarter, as expected, due to an unusually warm spring that pulled some customer demand forward, resulting in higher first-quarter revenue. Net income rose 30% to $247.3 million, or $1.07 a share, up from $190.6 million, or 81 cents a share in the same period a year ago. That beat earnings expectations of $1.05 a share, on average. Motorcycle and related product revenue rose 17 percent to $1.57 billion, up from $1.34 billion a year earlier. Analyst had expected revenue of $1.64 billion. The company reported healthy industry demand overall, with industry-wide sales of 651-cc and bigger bikes up nearly 8% in the first half of the year. Through six months, dealers sold 145,391 new Harley-Davidson motorcycles worldwide, up 9.3 percent. As is the case with many manufacturers, the company's management expects economic challenges in the back half of the year. "We continue to remain cautious in our expectations for retail sales globally in an environment of greater economic uncertainty, including in Europe where sales are clearly being affected by the challenging euro zone economy," said CEO Keith Wandell, in a statement. Still, Harley Davidson held firm to its annual sales plan. It still expects to ship 245,000 to 250,000 bikes to dealers this year, up 5 to 7% from what it shipped in 2011. It expects a decrease in Q3, mainly due to a planned slowdown at its York, Pa. manufacturing facility. The company expects full-year gross margins and capital spending to be in line with previous targets, as well.