Hefty cutbacks at Harley-Davidson
A weak economy has Harley-Davidson (HOG) cutting back again. The Milwaukee-based motorcycle manufacturer said Thursday it will cut 730 jobs as it trims output to adjust for a downturn in demand. The company also slashed its 2008 earnings forecast, saying it expects to ship some 25,000 fewer bikes this year than it did last year.
“With growing weakness in the economy, U.S. retail sales of Harley-Davidson motorcycles were down 12.8% in the first quarter,” said CEO Jim Ziemer. “Although these retail results are disappointing, Harley-Davidson’s U.S. dealers outperformed the heavyweight motorcycle industry, which was down 14%.”
For the first quarter, Harley was able to weather the storm. Harley made $188 million, or 79 cents a share, for the quarter ended March 31, compared with the year-ago $192 million, or 74 cents a share. Revenue rose 11% from a year ago to $1.31 billion. Those numbers beat the expectations of Wall Street analysts, who were looking for a 77-cent profit on revenue of $1.23 billion.
But the company said it now expects earnings for 2008 to fall to $3 to $3.18 a share from last year’s $3.74 a share. Back in January, Harley had forecast 4% to 7% growth. Shares fell 50 cents to $36.29 in pre-market trading.
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