What happened
Shares of Harley-Davidson (NYSE: HOG) fell 19% in afternoon trading on Tuesday after the company reported fourth-quarter and full-year 2020 earnings that fell well short of expectations.
So what
After the motorcycle manufacturer’s third quarter report hoped that the company’s revised turnaround plan, dubbed The Hardwire, might gain traction, the latest numbers show Harley is still stuck in the same quagmire as it was.
Where Wall Street expected Harley to make an adjusted profit of $ 0.21 per share, it actually amounted to a large loss of $ 0.44 per share. Last year, it posted a profit of $ 0.20 per share.
Image Source: Harley-Davidson.
It blamed weakness in the motorcycle market, which more than offset the profits of the financial services division.
What now
Harley-Davidson sales are still in a downward spiral. Motorcycle sales were down 51% in the quarter, while sales in the US were down 15% year over year and 13% elsewhere in the world. Shipments fell 48% to less than 21,000 units.
While the bike manufacturer didn’t mention the LiveWire in its other release, sales are included in the cruiser segment, and those bikes suffered the biggest global declines, down 54%. Tour and sports bikes were in the 40% range.
It indicates that Harley-Davidson has a much longer road to recovery than analysts previously thought. To consider Polaris Industries recently reporting its own results showing hefty sales profits for its Indian Motorcycle brand, investors shouldn’t expect Harley to come back roaring.