mika
Still Wondering
Harley-Davidson Motorcycles released its Third Quarter results today.
There are many figures that may be taken away from this release. Some figures jump out at the investor such as a 37.1% decrease in revenues resulting in a 33.6% decrease in earnings for the same reporting periods from last year.
H-D explains these decreases as a result of several things. These include an increase in its tax rates, non deductible charges incurred by MV Agusta (H-D completed its acquisition of MV in August) which H-D has taken in this period, the expiration of various tax credits which leaves H-D to incur the entire expenses for on going related business and changes in sales figures and finally the unit sales numbers. I will leave it to the various pundits to analyze the financial data and explanations. The latter is what I will be looking at.
A couple of definitions are in order first.
Heavy Weight Motorcycles: The report refers to this market and it is defined as motorcycles having an engine capacity of 651cc or greater. Separating unit numbers into market segments is becoming increasingly complicated with brand consolidations through acquisition and as the remaining manufacturers expand product lines outside their traditional segments such as the heavy weight segment as currently defined.
Buell, MV and other H-D brands: The report talks about Harley-Davidson trademarked motorcycles. I do not believe sales of Buell and MV are included in them. H-D traditionally has only included those numbers as a break down in their Annual Reports.
Comparisons:
Everyone wants to compare numbers to see where brands stack up against each other. October 8, BMW announced third quarter world wide year-to-date sales for the motorrad segment as:
y-t-d: 72,954 - 2.9% and for the month of September as 7,802 +1.8%
The Harley-Davidson Numbers
The following table is from the report information released today.
1 - United States industry data includes 651+cc models, derived from submission of motorcycle retail sales by each major manufacturer to an independent third party.
2 - Europe data includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. Industry retail motorcycle registration data includes 651+cc models, derived from information provided by Giral S.A., an independent agency. Europe market data is reported on a one-month lag.
To provide some historical context for these figures here is a table showing H-D shipments from 2003 through 2007.
Based on numbers from the H-D Investor site the decline in the US heavy weight market began to show in December of 2006. At that time it reported an increase in units of .06% while the heavyweight market had declined 1.7% overall in the US market. Since them H-D has shown a decline in shipments when compared to previous years.
Overall looking at the worldwide market H-D continues to show unit increases. In this report it claims a 9.6% increase over previous years.
The numbers that jumped out at me were from the US market. H-D reported a decrease of 15.5% in sales for the comparable period. More importantly it, for context, reported the heavy weight US market had decreased only 3.1% at the same time.
H-D v BMW
In many posts we look sideways as we talk about BMW. It often goes something like this.
Over at brand X they do this I wish BMW would do that.
In this case brand X is H-D. In the third quarter H-D sold roughly only 10,000 units world wide less than BMW is reporting world wide year to date. It is a case of comparing oranges to cucumbers. They are both moist foods but very different foods and lend themselves to different kinds of cooking.
BMW is showing an upswing in the short term while H-D continues show declines. The release of the F_ _ _ GS and early sales of the G450X probably account for much of this. The plus for BMW is it seems to have a different model mix that that is allowing them to better manage this troubled market than H-D.
The rest I leave to you. Have fun looking at the financials and other numbers.
We ride in interesting times.
Disclaimer:
I am not an investment analyst. I do not own any H-D or BMW stock beyond that which may be owned as part of a mutual fund or retirement program that I am not currently aware of being held. Anything said in this post should not be taken as investment advice. For investment advice seek qualified help and rely on your own best judgment based on your personal financial goals and needs.
Sources:
Harley-Davidson USA Investor Relations at investor.harley-davidson.com
BMW ÔÇô BMW Group and BMW PressClub
There are many figures that may be taken away from this release. Some figures jump out at the investor such as a 37.1% decrease in revenues resulting in a 33.6% decrease in earnings for the same reporting periods from last year.
H-D explains these decreases as a result of several things. These include an increase in its tax rates, non deductible charges incurred by MV Agusta (H-D completed its acquisition of MV in August) which H-D has taken in this period, the expiration of various tax credits which leaves H-D to incur the entire expenses for on going related business and changes in sales figures and finally the unit sales numbers. I will leave it to the various pundits to analyze the financial data and explanations. The latter is what I will be looking at.
A couple of definitions are in order first.
Heavy Weight Motorcycles: The report refers to this market and it is defined as motorcycles having an engine capacity of 651cc or greater. Separating unit numbers into market segments is becoming increasingly complicated with brand consolidations through acquisition and as the remaining manufacturers expand product lines outside their traditional segments such as the heavy weight segment as currently defined.
Buell, MV and other H-D brands: The report talks about Harley-Davidson trademarked motorcycles. I do not believe sales of Buell and MV are included in them. H-D traditionally has only included those numbers as a break down in their Annual Reports.
Comparisons:
Everyone wants to compare numbers to see where brands stack up against each other. October 8, BMW announced third quarter world wide year-to-date sales for the motorrad segment as:
y-t-d: 72,954 - 2.9% and for the month of September as 7,802 +1.8%
The Harley-Davidson Numbers
The following table is from the report information released today.
1 - United States industry data includes 651+cc models, derived from submission of motorcycle retail sales by each major manufacturer to an independent third party.
2 - Europe data includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. Industry retail motorcycle registration data includes 651+cc models, derived from information provided by Giral S.A., an independent agency. Europe market data is reported on a one-month lag.
To provide some historical context for these figures here is a table showing H-D shipments from 2003 through 2007.
Based on numbers from the H-D Investor site the decline in the US heavy weight market began to show in December of 2006. At that time it reported an increase in units of .06% while the heavyweight market had declined 1.7% overall in the US market. Since them H-D has shown a decline in shipments when compared to previous years.
Overall looking at the worldwide market H-D continues to show unit increases. In this report it claims a 9.6% increase over previous years.
The numbers that jumped out at me were from the US market. H-D reported a decrease of 15.5% in sales for the comparable period. More importantly it, for context, reported the heavy weight US market had decreased only 3.1% at the same time.
H-D v BMW
In many posts we look sideways as we talk about BMW. It often goes something like this.
Over at brand X they do this I wish BMW would do that.
In this case brand X is H-D. In the third quarter H-D sold roughly only 10,000 units world wide less than BMW is reporting world wide year to date. It is a case of comparing oranges to cucumbers. They are both moist foods but very different foods and lend themselves to different kinds of cooking.
BMW is showing an upswing in the short term while H-D continues show declines. The release of the F_ _ _ GS and early sales of the G450X probably account for much of this. The plus for BMW is it seems to have a different model mix that that is allowing them to better manage this troubled market than H-D.
The rest I leave to you. Have fun looking at the financials and other numbers.
We ride in interesting times.
Disclaimer:
I am not an investment analyst. I do not own any H-D or BMW stock beyond that which may be owned as part of a mutual fund or retirement program that I am not currently aware of being held. Anything said in this post should not be taken as investment advice. For investment advice seek qualified help and rely on your own best judgment based on your personal financial goals and needs.
Sources:
Harley-Davidson USA Investor Relations at investor.harley-davidson.com
BMW ÔÇô BMW Group and BMW PressClub
