Heavyweight motorcycles maker Harley-Davidson Inc. (HOG) reported Tuesday a surge in third-quarter profit, despite lower sales, helped by a turn around at its financial services unit, compared to a loss last year. The company, which has been in a transformation, posted a narrower loss from discontinued operations on its divesture of MV Agusta subsidiary. Further, the company narrowed its full year 2010 guidance for shipments of motorcycles by about 5% to 7% from last year. For the third quarter, the company's net income was $88.83 million or $0.38 per share, up from $26.48 million or $0.11 per share a year earlier. On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.36 per share for the third quarter. Analysts' estimates typically exclude special items. During the quarter, the company completed the divesture of its MV Agusta subsidiary. Loss from discontinued operations, net of tax was $4.89 million, narrower than $29.9 million reported in the preceding year. The Milwaukee-based manufacturer said operating income from Harley-Davidson Financial Services was $50.87 million, compared to a loss of $31.54 million in the preceding year. The improvement was mainly due to lower cost of funds and improvement in credit losses. Operating income from motorcycles & related products decreased to $101.5 million from $130.65 million in the prior year.
Net revenue from motorcycles and related products was $1.09 billion, down from $1.11 billion in the previous year. Analysts estimated revenues of $1.10 billion for the quarter.
Gross margin was 34.9%, up from 33.4 % in the year-ago period. Operating margin decreased to 9.3% from 11.8% last year, mainly due to higher restructuring and selling, general and administrative charges.
Retail sales of new Harley-Davidson motorcycles decreased 7.7% worldwide, 9.4% in the U.S. and 3.6% in international markets compared to the year-ago period.
Revenue from Harley-Davidson motorcycles in the third quarter was $798.8 million, down 0.6% from last year. Revenue from Parts and Accessories totaled $219 million, down 1.2% from a year ago and revenue from General Merchandise declined 9.4% from the prior year.
Keith Wandell, president and chief executive officer of Harley-Davidson, said, "With our strategic focus on future growth initiatives and continuous improvement, we are positioning Harley-Davidson to succeed at today's volumes, as well as to grow and restore greater profitability longer term." The Company shipped 53,293 Harley-Davidson motorcycles during the quarter, compared to 54,236 motorcycles in the third quarter of 2009.
Harley-Davidson lowered the cost estimate to complete its restructuring activities and now expects previously announced restructuring activities, which began last year, to result in total one-time charges of $505 million to $535 million into 2012, compared to the prior cost estimate of $515 million to $545 million, including charges of $190 million to $210 million in 2010.
Further the company said it is narrowing its full year 2010 guidance for shipments to 207,000 to 212,000 Harley-Davidson motorcycles to dealers, down approximately 5% to 7% from last year. Prior shipments guidance was 201,000 to 212,000 motorcycles. HOG closed Monday's regular trading at $32.49 on the NYSE.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.