Harley-Davidson projects sharp decline in earnings as sales dwindle

In the impending weeks, Harley-Davidson, a prominent motorcycle manufacturer, is set to unveil its latest earnings report. The U.S. motorcycle market is facing substantial challenges, as recent events have led to decreased consumer sentiment. Elevated interest rates have contributed to this downturn, and the situation appears to be worsening, with February motorbike sales dropping by 20.7% year-over-year. Concurrent to these market challenges, U.S. tariffs initiated during the Trump administration have placed additional burdens on the motorcycle manufacturer, complicating their operational environment further. Analysts are currently projecting Harley-Davidson's upcoming revenue at around $1.11 billion, with a predicted earnings per share of $0.78, significantly lower than the $1.72 reported during the same quarter last year. As a reflection of its struggles, Harley's stock has seen a notable decline of over 25% since the start of the calendar year. Furthermore, the motorcycle company's overall market capitalization stands at $2.7 billion, supported by trailing twelve-month revenue of $5.2 billion. Despite these financial strains, Harley-Davidson remains operationally profitable, having reported an operating profit of $417 million and a net income of $455 million recently. History indicates that the response to their earnings report can vary; over the past five years, there was a 67% chance of stocks showing gains the day after the earnings announcement. However, limiting this data to the last three years reveals a reduced likelihood of 55%. Investors may find correlation analysis useful regarding the post-earnings returns. In recent times, peer earnings announcements have also been known to influence stock reactions. Hence, upcoming earnings reports of similar companies can shape the market's expectations for Harley-Davidson.