Harley-Davidson Q1 2011 Earnings up 350%

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Before the opening bell on the New York Stock Exchange, Harley-Davidson posted its first quarter numbers of 2011 this morning. Despite earnings being up 350% when compared to Q1 of 2010, Harley-Davidson is showing only a modest turnaround compared to its competitors, as worldwide sales are only up 3.5% compared to last year’s. Still, the company has to be pleased with being back in the black, as Harley-Davidson reported over $119 million in profits (Harley-Davidson made $33.3 million in Q1 2010).

The reason for the less enthusiastic news is because these positive numbers were fueled by the company’s financial services division, which is finally posting profits after nearly collapsing the company during the recession, instead of an increase in bike sales. While Harley-Davidson is touting a 155% revenue increase from the HDFS side of accounting books, it goes without saying that when one does barely any financing in 2010, it’s easy to post results like this. Furthermore, future HDFS financial success is pegged to new Harley-Davidson motorcycle sales, which still show a bleak future.

For Wall Street the news was taken as a less than positive sign, as Harley-Davidson missed the earning predictions of analysts by $0.02/share. Accordingly Harley-Davidson stock was down 4.28% at the time of this writing. Adding insult to injury was the investment site Motley Fool giving Harley-Davidson a two-star rating, citing a dwindling brand value and plummeting sales trajectory.

Harley-Davidson sold 17,904 motorcycles worldwide last quarter, up 11.3 % from Q1 last year. However, sales in the United States were down 0.5% (31,691 units), despite the “heavyweight” market segment (bikes of 651cc or more) growing by 3.1% here in the USA. As such, Harley-Davidson has readjusted its sales expectations in 2011 from 221,000 to 228,000 motorcycles to 215,000 to 228,000. Harley-Davidson expects to ship 62,000 to 67,000 motorcycles in Q2 2011.

Source: Harley-Davidson