Harley-Davidson Lowers Shipment Guidance, To Cut Jobs As Q3 Results Miss View

(RTTNews) - Shares of Harley-Davidson, Inc. (HOG) are down almost 12 percent in regular trades on Tuesday after the motorcycle maker reported profit and revenue for the third quarter that missed analysts' expectations. The company also said it will lay off employees and lowered its full-year shipment guidance, noting that the third quarter did not unfold as it expected.

Harley-Davidson now expects to ship 265,000 to 270,000 motorcycles to dealers and distributors worldwide in 2015, which is about flat to down 2 percent from 2014. The company had earlier provided full-year shipment guidance of 276,000 to 281,000 motorcycles.

In the fourth quarter, the company expects to ship 47,000 to 52,000 motorcycles, compared to 47,157 motorcycles shipped in the year-ago period.

In 2016, Harley-Davidson will increase its investment in customer-facing marketing by about 65 percent and investment in new product development by about 35 percent from 2015 levels. The company intends to fund these by reallocating existing spending.

Harley-Davidson expects to incur one-time expenses of about $30 million to $35 million in the fourth quarter of 2015, primarily for employee separation and reorganization costs related to this reallocation. However, the company did not provide further details of how many job cuts it plans.

The company said that dealers worldwide sold 72,178 new Harley-Davidson motorcycles in the third quarter, down 1.4 percent from last year.

Harley-Davidson's third-quarter net income was $140.3 million or $0.69 per share, compared to $150.1 million or $0.69 per share in the prior-year period. On average, 19 analysts polled by Thomson Reuters expected the company to earn $0.78 per share. Analysts' estimates typically exclude special items.

Consolidated revenue for the quarter rose 1.5 percent to $1.32 billion from $1.30 billion in the year-ago period. Motorcycles and related products revenues edged up to $1.14 billion from $1.13 billion last year. Analysts expected revenue of $1.21 billion for the quarter.

HOG is trading at $49.11, down $6.94 or 12.38 percent on a volume of 10.87 million shares.