For the Buell and MV loyal, Harley-Davidson’s latest earnings report should provide all the information as to why the Milwaukee manufacturer had to close and sell those brands respectively. Reporting a nearly 90% loss in annual income, Harley-Davidson earned only $70.6 million in 2009, compared to the $684.2 million Harley earned in 2008, which results in a staggering loss of income for the iconic motorcycle company.
For Q4 of 2009, Harley-Davidson actually operated in the red, and lost $218.7 million in net income by staying in business (Asphalt & Rubber actually made more money during the same time period than Harley-Davidson did, if that puts things into perspective). Additionally, Harley-Davidson is reporting a $147.2 million loss in revenue during its fourth quarter operations. The loss is associated with the reduction in production, and the $167.1 million in restructuring costs incurred because of the closure of the Buell Motorcycle brand.
“Our full-year 2009 results were affected by the difficult economy, as well as the planned actions we took that resulted in restructuring charges of $224 million. We believe these actions are critical to restoring greater profitability and long-term growth to Harley-Davidson,” says Keith Wandell, Harley-Davidson, Inc. president and chief executive officer. “We are confident we have made the right decisions for our future, and we are executing our strategy with focused intensity.”
Despite the focused intensity, Harley-Davidson still believes it has a shakey 2010 ahead for itself, which is a fancy way for the company to say that it expects to report further losses in the future. On top of that, Harley-Davidson is planning to ship between 5%-10% less motorcycles in 2010, when compared to 2009 shipments.
“Focusing our investment behind the uniquely strong Harley-Davidson brand provides the most attractive path to sustained, long-term growth,” says Wandell. “We also expect to achieve substantial gains in the efficiency of our operations through continuous improvement.”
For 2009 Harley-Davidson reported $4.78 billion in revenue, which was a 14% drop from the $5.56 billion in revenue reported in 2008. Harley-Davidson reported its 2009 annual income at $70.6 million, down 89.7% from the 2008’s $684.2 million.
As expected, Wandell’s strategy involves circling the wagons around the Harley-Davidson brand. “Focusing our investment behind the uniquely strong Harley-Davidson brand provides the most attractive path to sustained, long-term growth,” says Wandell. “We also expect to achieve substantial gains in the efficiency of our operations through continuous improvement.”