Harley-Davidson deals with tariff damages and prepares an intervention plan



[ad_1]

Adjusted earnings for the second quarter were US $ 1.52, which exceeds the average analyst estimate of US $ 1.41

Harley-Davidson Inc. reduced its expected profit margin for this year by an amount that suggests that he finds a way to deal with the damage caused by the trade war of President Donald Trump.

The operating margin will fall this year to about 9.5%, which corresponds to the mid-point of a range that the Milwaukee-based manufacturer has delivered Tuesday in a statement, citing the company's current record. expected impact of tariffs. The company had forecast a margin of about 10%.

The lower projection suggests that rates could reduce Harley's profits less than expected. The projection equates to a difference of about 25 million US dollars, less than Harley 's previous estimate that EU tariffs would increase costs by 30 to 45 million dollars, writes in a note to customers David Beckel, analyst by Sanford C. Bernstein & Co.

Adjusted earnings for the second quarter was US $ 1.52, which exceeds the analysts' average estimate of $ 1.41 US. Revenues dropped to US $ 1,530 million, higher than the average projection of US $ 1,420 million.

The Harley stock rose 3.6% to $ 42.93 US at 8:22. in New York, before the start of regular operations. Stocks had lost 19% this year until the close of Monday.

Trump's Attack

Harley was trapped last month in the crossfire of Trump's trade war when he announced his intention to move some of his American production to the United States. To avoid the higher tariffs imposed by the EU. The president attacked the iconic American company, claiming that he was using the privileges as an excuse to send jobs abroad. Harley had already announced plans to close a plant in Missouri and build one in Thailand

EU tariffs on steel and aluminum taxes Trump would cost about $ 2,200 per motorcycle. Harley, said the company in a report reported on June 25. The manufacturer did not specify which of its plants abroad would start producing motorcycles for European users.

Harley is trying to overcome rising trade tensions as sales in his main US market continue to decline. Shipments of motorcycles in the United States contracted by 6.4% in the second quarter, the fourteenth decline of the last 15 quarters. World sales fell 3.6%

The EU imposed tariffs on June 22 on Harley motorcycles and other products manufactured in the United States, which limits the impact second quarter results. International sales increased 0.7%, driven by increases in Europe, the Middle East and Latin America.

Response Plan

The company's CEO, Matt Levatich, is having trouble attracting young consumers with premium motorcycles and has begun launching a series of cheaper models. Levatich aims to have two million new US customers in 2027 and half of its global revenues come from outside the United States. Harley will release more details on his response strategy on July 30th.

Harley's projection of motorcycle shipments for this year remained unchanged, and his measures to consolidate the manufacturing sector in the United States. They are on the right track, which can help counter nervousness from investors about the tariff, wrote Morgan Stanley analyst Adam Jonas in a research note

"While this may allow a break in the pressure action, is unlikely to attract a serious increase in capital, "he said. [ad_2]
Source link