Last Resort Posted October 15, 2009 Share Posted October 15, 2009 SAN FRANCISCO (MarketWatch) -- Harley-Davidson Inc. shares shrugged off early declines Thursday after the motorcycle giant reported a steep drop in third-quarter profit and said it will discontinue production of its Buell sport-bike brand. Harley stock followed the broader market back into the green by midmorning, up 1.4% at $26.64. The shares are up 57% since the beginning of the year. The Milwaukee-based company posted a profit of $26.48 million, or 11 cents a share, an 84% retreat from $166.54 million, or 71 cents a share in the year-ago period. The latest quarter included a one-time charge of $14.2 million related to Buell and a goodwill impairment charge of $18.9 million related to the sale of MV Agusta. Total revenue fell to $1.1 billion from $1.4 billion a year earlier as retail sales fell 21.3% worldwide and 24.3% in its home market. Analysts polled by FactSet Research were looking for a profit, on average of 23 cents a share with revenue of $1.1 billion. "While the environment remains challenging for us, we are mildly encouraged by the moderation in the decline of dealer retail Harley-Davidson motorcycle sales," CEO Keith Wandell said. "And moving forward, our strategy is designed to strengthen Harley-Davidson for long-term growth and deliver results through increased focus. The company said that 180 jobs will be lost over time as it shuts down Buell. It said it will book one-time charges of $215 million to $245 million in 2009 and 2010, about $55 million ahead of its July projections. Harley said it expects to ship 35,000 to 40,000 motorcycles in the fourth quarter and a total of 222,000 to 227,000 for the full year. Wells Fargo Securities analyst Tim Conder, who upgraded the stock to outperform a day earlier, lauded the report and the direction Harley is headed. "We would continue to aggressively build positions as we believe margins will be further enhanced (from what reported) given discontinuance of Buell & MV Agusta," he said in a note to clients following Harley's conference call. Quote Link to comment Share on other sites More sharing options...
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