Harley-Davidson Shares Slide 5% Premarket After Company Lowers Full-year Guidance

By Ciara Linnane Markets MarketWatch Pulse

Harley-Davidson Inc. shares fell 4.9% in premarket trade Tuesday, after better-than-expected earnings for the second quarter were overshadowed by lowered guidance for the year. The motorcycle maker said it had net income of $258.9 million, or $1.48 a share, in the second quarter, down from $280.4 million, or $1.55 a share, in the year-earlier period. Revenue fell to $1.77 billion from $1.86 billion. The FactSet consensus was for EPS of $1.38 and revenue of $1.59 billion. Retail motorcycle sales fell 6.7% in the quarter and were down 9.3% in the U.S. "Given U.S. industry challenges in the second quarter and the importance of the supply and demand balance for our premium brand, we are lowering our full-year shipment and margin guidance," Chief Executive Matt Levatich said in a statement. The company is now expecting to ship 241,000 to 246,000 motorcycles to dealers worldwide in 2017, down 6% to 8% from 2016. Previous guidance was for full-year shipments to be flat to down modestly. For the third quarter, it expects to ship 39,000 to 44,000 motorcycles, down 10% to 20% from 2016. Full-year operating margins are expected to be down about 1 percentage point. Capex guidance is unchanged at $200 million to $220 million. Shares are down 11% in 2017 through Monday, while the S&P 500 has gained 10%.

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