Harley-Davidson's Stock Tumbles After Profit Miss, Shipment Outlook Cut

Harley-Davidson Inc.'s stock tumbled 7.2% in premarket trade Tuesday, after the motorcycle seller reported a third-quarter profit that missed expectations and cut its full-year motorcycle shipment forecast, citing a heightened competitive environment. Earnings for the quarter ended Sept. 27 came in at $140.3 million, or 69 cents a share, from $150.1 million, or 69 cents a share, in the same period a year ago, below the FactSet consensus for earnings per share of 78 cents. Revenue rose to $1.32 billion from $1.30 billion, above the FactSet consensus of $1.22 billion. Total new Harley-Davidson motorcycle sales slipped to 72,178 from 73,217, with U.S. sales falling to 48,918 from 50,167. For the full-year, the company cut its shipment outlook to 265,000 to 270,000 motorcycles from 276,000 to 281,000. The company said it will increase investment to improve demand by $70 million in 2016, lifting marketing spending to 65% above 2015 levels, and investment in new product development by 35%. "We expect a heightened competitive environment to continue for the foreseeable future, and now is the time for us to dial things up with significant additional investments in marketing and product development," said Chief Executive Matt Lavatich. The stock had lost 15% year to date through Monday, while the S&P 500 has lost 1.2%.

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