Harley-Davidson (HOG) Soars 10% on Beat-and-Raise, Plans to Appeal European Union 56% Tariff
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Shares of Harley-Davidson (NYSE: HOG) have soared 10% today after the company announced better-than-expected earnings in Q1.
The company saw its total revenue rise to $1.42 billion in the quarter to March 28, from around $1.30 billion a year earlier. Net income skyrocketed to $259 million in the first quarter, from $70 million a year earlier.
HOG also raised its full-year guidance to now expect motorcycle revenue to grow in the range of 30% to 35% in 2021, higher from the earlier guidance in the range of 20% and 25%.
"I am very pleased with the pace of recovery that we have seen across our business, as demonstrated by the strong financial results this quarter. The actions we have taken to reshape the business are having a positive impact on our results, especially for our most important North American region," said Jochen Zeitz, chairman, president and CEO, Harley-Davidson.
"We can see the initial signs of consumer excitement and optimism returning and I am confident Harley-Davidson in 2021 is a significantly leaner, faster, and more efficient organization which is ready to win and successfully deliver on our 5-year Hardwire strategy, as the most desirable motorcycle brand in the world."
HOG saw its Q1 sales jump by 9%, led by a strong performance of its North American business unit. Retail sales fell 36% in the EMEA region, and as much as 59% for the Latin American region.
On the shipments front, HOG topped the market estimates by reporting 54,810 shipments versus 54,700 expected from analysts. In the US, the company’s biggest market by far, Harley-Davidson delivered 40,153 units to smash 33,183 consensus.
In separate news, HOG announced plans to “vigorously defend” its position after being hit by a crippling European Union tariff of 56%.
"This is an unprecedented situation and underscores the very real harm of an escalating trade war to our stakeholders on both sides of the Atlantic. The potential impact of this decision on our manufacturing, operations and overall ability to compete in Europe is significant,” Zeitz said in a statement.
“Imposing an import tariff on all Harley-Davidson motorcycles goes against all notions of free trade and, if implemented, these increased tariffs will pose a targeted competitive disadvantage for our products, against those of our European competitors."
Effective from June this year, Harley-Davidson motorcycles will be a subject to a 56% tariff, which is much higher than the prior 6% tariff. On the other side, United States import tariffs on EU-made motorcycles is at 1.2% for engines of up to 800CC and 2.4% for larger engines.
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