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MIXED QUARTER FOR HARLEY

Ameliorated by improving domestic and international retail sales, Harley-Davidson’s third-quarter financial results revealed a year-on-year drop in revenue and profit.

Harley has reported a 4.2 per cent revenue decline from motorcycles and related products to £700m in the three-months to 30 September. Associated operating profit fell by 16.6 per cent to £90.6m. This reflected lower wholesale shipments to dealers in the face of excessive showroom inventory, following weak sales during the first half of 2014 allied to a botched roll-out of the new small-capacity Street range.

However, its US consumer funding arm HDFS benefited from domestic retail bike sales recovery, with quarterly revenue growing by 4.7 per cent to £105.9m and operating profit up by 2.2 per cent to £48.1m.

For the company as a whole, third-quarter operating profit was down by 10.9 per cent to £138.7m. Net profit dropped by 7.8 per cent to £92.9m.

On a brighter note, the brand’s global dealer network shifted 3.8 per cent more bikes to retail customers than in the same period last year, a tally of 73,217 units. US dealers broadly matched recent investment analyst performance estimates with a 3.4 per cent increase to 50,167 units.

Export markets overall rose by 4.8 per cent to 23,050 units. Best performers were the Asia Pacific region and Latin America, respectively with 12.8 per cent and seven per cent improvements. Europe (including the Middle East and Africa) was also positive, up by 1.7 per cent. Only Canada was negative, down by 5.8 per cent.

For the nine months of 2014 to date, Harley’s consolidated revenue has grown by 6.8 per cent to £3.11bn. Operating profit is up by 14.6 per cent to £732m. Net profit stacked on 16.9 per cent to £476.8m.

Harley says that it still plans to ship 270,000 to 275,000 motorcycles to dealers worldwide in the full 12 months of 2014, an approximate 3.5 to 5.5 per cent boost against last year.

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