U.S. motorcycle maker Harley Davidson reported a smaller-than-expected profit Thursday, sending its shares lower in premarket trading, as the economy’s slow recovery weighed on bike sales.
The company plans to discontinue its Buell product line and sell its MV Agusta unit, essentially exiting the sport bike market. It expects to book $125 million in one-time costs associated with the moves.
The company plans to discontinue its Buell product line and sell its MV Agusta unit, essentially exiting the sport bike market. It expects to book $125 million in one-time costs associated with the moves.
Harley-Davidson’s third-quarter profit tumbled 84 percent to $26.5 million, or 11 cents a share, from $166.5 million, or 71 cents, a year earlier. Sales fell 21 percent to $1.12 billion.
Analysts, on average, expected the Milwaukee-based company to report a profit of 21 cents a share on sales of $1.1 billion.
Retail sales of new Harleys skidded 21.3 percent during the quarter. In the United States, the company’s biggest market, retail sales of the company’s bikes fell 24.3 percent from the year-earlier period.
The company’s finance unit, meanwhile, reported an operating loss of $31.5 million as a result of higher provisions for credit losses in both the retail and wholesale portfolios as well as increased interest expense.
Its shares were down 3.4 percent at $25.36 in premarket trading.
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The Buell brand, based in East Troy, Wis., will shut down later this month, although Harley will continue to supply replacement parts and honor warranty claims. About 180 workers will lose their job