Harley-Davidson Earnings Down
Poor results due to Trump tariffs, changing consumer preferences.
Harley-Davidson Inc. reported disappointing earnings numbers Tuesday for the fourth quarter of 2018.
The Milwaukee-based motorcycle company cited restructuring costs and tariffs for the paltry 17 cents per share profits. That figure was below analysts’ estimates of 29 cents.
In a conference call with investors and the media, Matt Levatich, the company’s CEO and president, touted a program called “More Roads to Harley Davidson,” which he called a strategy to build the next generation of Harley-Davidson riders.
“In 2018, we met or exceeded all stated planned milestones,” he said.
Harley-Davidson shares have outperformed the S&P 500’s gains, and the company’s stock closed Tuesday at $34.76, down $1.85.
Kevin Spellman, a professor at the David O. Nicholas School of Investments at the University of Wisconsin-Milwaukee, said Harley-Davidson was hurt by tariffs on steel and aluminum imposed by the Trump administration. He said the company has also faced changing consumer preferences in terms of large motorcycles that are cost prohibitive to younger riders, some temporary costs associated with recalls and a plant closure in Kansas.
“They are expanding quite a bit,” Spellman said. “Internationally, right now, is only 30 percent of their sales. But that is where some of their growth is coming from.”
Levatich said during the call he believes they’re reaching new sectors of the public.
“Our execution is on track and we’re energized that we’re getting new and different people, riders and non-riders, to stand up and take notice of Harley-Davidson,” he said.
To that end, Harley-Davidson is turning attention to new products, like the electric motorcycle called LiveWire, which has a starting price of $29,799. The company is also working on electric scooters and bicycles.
David Bieberitz, a business school major at the UW-Milwaukee who has written a thesis on Harley-Davidson, said he feels the LiveWire bike is a good idea, but that it may be cost prohibitive to the company’s target market of young riders.
“In terms of motorcycles, it is very expensive,” Bieberitz said, noting it’s more expensive than many cars on the market.
“So that is the part of the LiveWire that I think can really negatively affect Harley-Davidson’s growth,” he said.
The company employs approximately 2,000 workers in its plants in Menominee Falls and Tomahawk.
Listen to the WPR report here.
Harley-Davidson Releases Disappointing Fourth-Quarter Earnings was originally published by Wisconsin Public Radio.
More about the Trump Tariffs
- Data Wonk: How Walker, Trump Hurt Dairy Industry - Bruce Thompson - Mar 13th, 2019
- Ron Johnson Calls for Ending Tariffs - Hope Kirwan - Feb 8th, 2019
- Harley-Davidson Earnings Down - Patty Murray - Jan 31st, 2019
- Tariffs Affecting Great Lakes Ports - Danielle Kaeding - Jan 5th, 2019
- Trump Tariffs Hurt Milwaukee Port - Danielle Kaeding - Sep 4th, 2018
- Harley Riders Oppose Boycott of Company - Laurel White - Sep 3rd, 2018
- Answer the Question, Scott Walker - One Wisconsin Now - Aug 13th, 2018
- Trump’s Aid to Farms Gets Mixed Reviews - Rich Kremer - Jul 26th, 2018
- Voters Unhappy About Tariffs, State Roads - Chuck Quirmbach - Jul 19th, 2018
- Businesses Complain About Trump Tariffs to Johnson - Chuck Quirmbach - Jul 17th, 2018
- Canada’s Tariffs Target Wisconsin - Scott Gordon - Jul 16th, 2018
- Data Wonk: How Trump Threatens State’s Exports - Bruce Thompson - Jul 5th, 2018
- Walker Avoids Harley Issue at Parades - Chuck Quirmbach - Jul 5th, 2018
- Campaign Cash: Harley Gave Generously to Republicans - Wisconsin Democracy Campaign - Jun 26th, 2018
- Harley-Davidson Job Losses: Walker Owns This - Democratic Party of Wisconsin - Jun 26th, 2018
- Scott Walker Flies While Harley Davidson Flees - One Wisconsin Now - Jun 26th, 2018
- Op Ed: Trump Dead Wrong on Canadian Trade - John Torinus - Jun 21st, 2018
- Op Ed: Trump’s Tariffs Hurt Wisconsin Economy - John Torinus - Jun 11th, 2018
- Trump Tariffs Threaten State’s Exports - Steven Deller, Tessa Conroy and Matthew Kures - May 13th, 2018
- Op Ed: Trump Tariffs Will Harm Trump Country - John Torinus - Mar 14th, 2018
- Statement Regarding Governor Walker’s Phone Call with U.S. Department of Commerce Secretary Wilbur Ross - Gov. Scott Walker - Mar 9th, 2018
- Op Ed: Ryan Finally Stands Up to Trump - Gregory Humphrey - Mar 8th, 2018
- Governor Walker Visits Wisconsin Employers in Oshkosh, Janesville that Have Expressed Concern with President Trump’s Proposed Tariffs on Steel and Aluminum - Gov. Scott Walker - Mar 6th, 2018
- Governor Walker Releases Statement on the Trump Administration’s Proposed Steel and Aluminum Tariffs - Gov. Scott Walker - Mar 2nd, 2018
- Norquist: Trump Tariffs Will Hurt State Workers - John Norquist - Feb 2nd, 2017