Harley-Davidson Inc Tanks On Lower FY14 Guidance

The stock price of Harley-Davidson Inc (NYSE:HOG) declined despite reporting better-than-expected financial results for the second quarter. The shares of the company were trading around $63.023 per share, down by more than 6% at the time of this writing, around 1:29 in the afternoon in New York today.

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Reason behind Harley-Davidson’s stock decline

Harley-Davidson Inc (NYSE:HOG) declined due to its full-year 2014 guidance that it is lower than its previous estimate. The company expected to ship around 270,000 to 275,000 new motorcycles to dealers and distributors worldwide this year, an increase of 3.5% to 5.5% from last year. Its previous estimate was higher at around 279,000 to 284,000 motorcycles for the full year 2014.

For the third quarter, Harley-Davidson Inc (NYSE:HOG) expected to ship 49,000 to 54,000 motorcycles, which is also lower than its motorcycle shipments of 54,025 units in the same period in 2013.

The company expected its operating margin for its motorcycle segment to be around 17.5% to 18.5% this year. Harley-Davidson Inc (NYSE:HOG) estimated to its capital expenditures between $215 million and $235 million for 2014.

Second-quarter financial results

Harley-Davidson Inc (NYSE:HOG) reported that its earnings increased 33% to $1.62 per diluted share and $1.84 billion in revenue for the second quarter. Wall Street analysts expected the company to deliver $1.46 in earnings per share on $1.83 billion in revenue.

According to the motorcycle company, its strong financial performance was driven by higher motorcycle shipments and continued improvement in operating efficiencies.

In a statement, Keith Wandell, chairman, president and CEO of Harley-Davidson Inc (NYSE:HOG) said, “Harley-Davidson’s second-quarter results reflect the financial strength of the company and brand, including the benefits of continuous improvement throughout our operation.”

“We believe the underlying demand fundamentals of the business remain intact. We continue to see a strong response to the new Rushmore models as well as great interest in the Harley-Davidson Street™ 750 and 500, which began to hit dealer showrooms on late June,” he added.

Harley-Davidson motorcycle retail sales

During the second quarter, the company sold 90,218 new Harley-Davidson motorcycles worldwide including 58,225 units sold in the United States.

Harley-Davidson Inc (NYSE:HOG) said its retail sales in the United States were negatively affected by the prolonged severe weather in certain parts of the country as well as the weak sales performance of the Sportster motorcycle prior to the arrival of the Street motorcycles in dealers’ showrooms.

The company sold 31,993 new Harley-Davidson motorcycles in international markets. Its sales increased 7% in the EMEA region and 1.5% in the Asia-Pacific region. The company said its sales in Latin America and Canada 10.4% and 18%, respectively.