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  #1  
Old 13th April 2005
asnaith asnaith is offline
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Default Harley stock Down 16% today

Looks like sales were lower than a year ago. No one seems to have seen this coming.
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  #2  
Old 13th April 2005
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Shows you how kneejerk the market is these days. They adjust down there projections for FY05 by 3% and suffer a resulting 16% loss in market value within a few hours. I think I might by some today while it's down.
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Old 13th April 2005
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Profit was up 11% overall, but HD has reduced it's forcasts for 2005 due to soft sales.


Harley-Davidson Inc.: 58.77: It must be the thunderous cacophony emerging from a gleaming tail pipe that overpowers everything in its path that continues to attract riders to Harley's bikes. Well, actually, it's all that Harley-Davidson stands for quality, passion, and creating an unforgettable experience of motorcycling. This Milwaukee, Wisconsin-based company dating back to 1903 reported its Q1 guidance a penny ahead of expectations. Although, this was not a big surprise considering the company always beats expectations. The last time it only matched consensus was in the third quarter of 1998!

However, considering this success rate, shares are likely to suffer severe selling pressure after the company cut its FY05 guidance. Shares are already down over 7% in the pre-market. It now forecasts 5-8% growth, down from its previous guidance of mid-teens level growth due to weaker than expected domestic retail sales.

CEO Elect Jim Ziemer said due to weaker Q1 sales we feel it's prudent to limit short-term production growth, maintaining demand in excess of supply. As such, it now estimates shipments of 329,000 units, down from its previous target of 339,000. With 77,000 units shipped in the second quarter, 87,500 units in the third quarter, and 87,500 units in Q4. The revised shipment guidance represents 3.4% growth from 2004. Harley maintained its long-term unit growth projection of 7-9% per annum along with its earnings projection of mid-teens growth over the longer-term.

Even though the upside in earnings is likely to take a back seat to guidance, let's take a look at the quarter. The company reported earnings of $227.2 mln, or $0.77 per share up 13% from last year's period. On the top line, revenues rose 6.0% year/year to $1.24 bln, vs. the $1.23 bln consensus. Total shipments were 76.7k units - up 3.5% y/y.

Worldwide sales of motorcycles rose 2.8%. Growth was heavily weighted overseas with Europe and Japan up 20.6% and 10.6%, respectively. As a result, HDI benefited from currency gains for the quarter. US sales were down slightly. Sales in Parts & Accessories totaled $176.9 mln, up 4.6% y/y. Its Financing arm (HDFS) record $730 mln in loans, realizing a gain of $19.2 mln down from $25.2 mln last year. Credit losses grew slightly to 1.07% from 0.77% in 2004. Citing higher rates and a competitive environment, Harley expects HDFS income to be slightly lower y/y.

Gross margins for the motorcycle segment was 37.6% roughly flat with last year of 37.8%. The company noted cost pressures due to higher materials, primarily metal surcharges, On an operating level, margins rose 130 basis points to 24.2% due to lower costs.

Harley's success is built on the strength of its brand name worldwide. Historically, the second quarter is seasonally a strong period as warmer temperatures and spring fever lures consumers back into showrooms. Yet during its conference call, HDI said it expects earnings to be below last year of $0.82 vs. consensus of $0.92. According to industry analysts, dealers are confident in their sales projections for Q2 driven by new models including the 15th anniversary of Fat Boy and the new Street Rod and Sportster. So we will have to wait and see how sales trends shape up. Shares are trading near the bottom end of its historical range at 17.4x. For longer-term investors able to ride out near-term volatility, HDI represents a solid growth story at discounted valuations. ----Kimberly DuBord, Briefing.com
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  #4  
Old 13th April 2005
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I sold my HD stock 2 1/2 years ago, made a tidy profit and paid off the loan on my metric cruiser which I subsequently sold to buy my Sportster! What would an economics professor say about that?
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  #5  
Old 13th April 2005
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MILWAUKEE, April 13 /PRNewswire-FirstCall/ -- Harley-Davidson, Inc. (NYSE:
HDI) today announced record revenue and earnings for its first quarter ended
March 27, 2005. Revenue for the quarter was $1.24 billion compared with $1.17
billion in the year-ago quarter, a 6.0 percent increase. First quarter
diluted earnings per share (EPS) were 77 cents, a 13.2 percent increase
compared with last year's 68 cents.

"As I prepare to take on the role of Chief Executive at Harley-Davidson, I
am pleased that the Company is on a strong footing, having achieved another
record quarter," said Jim Ziemer, Chief Financial Officer and CEO Elect,
Harley-Davidson, Inc. "Looking ahead, we expect Harley-Davidson's business
to continue to grow and 2005 to be our 20th consecutive record year."

"At the same time, U.S. retail sales of Harley-Davidson motorcycles during
the first quarter of 2005 have been relatively flat with the same period last
year-falling short of our expectations. Despite our continued optimism for
the year, we feel it is prudent to limit short-term production growth,
maintaining demand in excess of supply. This action will result in a change
to our previous guidance for both shipments and earnings growth for 2005. Our
shipments are now planned to increase from last year's 317,000 units to a
target of 329,000 units compared to our original target of 339,000 units. Our
2005 earnings are expected to grow by approximately 5-8 percent in 2005
compared to our previous forecast of mid-teens earnings growth."

"While this volume adjustment may prevent us from attaining our previous
goal of 400,000 units in 2007, we see no reason to change our long-term unit
growth projection of 7-9 percent annually based on just three winter months of
sales data. Similarly, we are not changing our projection of mid-teens
earnings growth other than for this year," Ziemer added.

"For nineteen consecutive years, this management team has delivered record
results, and I have the utmost confidence that the actions we are taking are
appropriate and in our stakeholders' long-term interests," said Jeff
Bleustein, Chairman and Chief Executive Officer of Harley-Davidson, Inc.

Motorcycles and Related Products Segment

First quarter revenue from Harley-Davidson(R) motorcycles was $979.0
million, an increase of 6.5 percent over the first quarter last year.
Shipments of Harley-Davidson motorcycles totaled 76,716 units, up 2,626 units
or 3.5 percent over last year.

First quarter revenue from Parts and Accessories (P&A), which consists of
Genuine Motor Parts(TM) and Genuine Motor Accessories(TM), totaled $176.9
million, a 4.6 percent increase over the year-ago quarter. For the longer
term, the Company expects P&A revenue to grow at a rate slightly faster than
the motorcycle unit growth rate.

General Merchandise revenue, which consists of MotorClothes(R) apparel and
collectibles, was $59.5 million in the first quarter, up 9.3 percent over the
same period last year. For the longer term, the Company expects General
Merchandise revenue to grow at a rate lower than the motorcycle unit growth
rate.

First quarter gross margin for the Motorcycles and Related Products Segment
was 37.6 percent of revenue, approximately the same as the year-ago quarter of
37.8 percent. Gross margin was negatively impacted by higher material costs,
primarily metal surcharges; it benefited from favorable foreign currency
exchange. Operating margin grew to 24.2 percent from 22.9 percent due to
lower operating expenses.

Motorcycle Retail Sales Data

In the United States through March, Harley-Davidson retail motorcycle
sales finished down approximately one percent compared to 2004. Similarly,
the U. S. heavyweight motorcycle market declined 0.4 percent in the first
quarter.

Worldwide retail sales of Harley-Davidson motorcycles grew 2.8 percent for
the quarter, driven by strong performance in Europe and Japan, which increased
20.6 and 10.6 percent respectively. On an industry-wide basis through
February 2005, the 651+cc segment grew slightly in Europe, while the
heavyweight market in Japan was down for the same period. Data is listed in
the accompanying tables.

Financial Services Segment

Harley-Davidson Financial Services (HDFS) reported operating income of $53.6
million, up $3.3 million or 6.5 percent compared to the year-ago quarter.
HDFS continued to experience strong customer acceptance of its financial
products.

During the quarter, HDFS sold $730 million in retail motorcycle loans and
recorded a gain of $19.2 million. This compares with a gain of $25.2 million
on $625 million of loans securitized during the first quarter of 2004. The
gain of 2.6 percent as a percentage of loans sold is slightly above
management's guidance which is now 1.7 to 2.5 percent in the current interest
rate environment.

Annualized credit losses on a managed portfolio basis increased during the
quarter to 1.07 percent in 2005 from 0.77 percent in 2004 due to the
combination of a higher incidence of losses and lower recovery rates. HDFS is
maintaining its credit loss target of 1 percent or less of managed
receivables.

In 2005, HDFS operating income is expected to be slightly lower than that
achieved in 2004 primarily due to a highly competitive marketplace and an
increasing interest rate environment. For the longer term, the Company
expects the HDFS operating income growth rate to be slightly higher than the
Company's motorcycle unit growth rate.

Stock Option Accounting

On January 1, 2005 the Company adopted new accounting rules requiring it to
recognize expense related to the fair value of its employee stock option
awards. Total stock compensation expense recognized by the Company during the
first quarter of 2005 was $7.0 million.

Cash Flow

Operations generated cash of $51.7 million during the first quarter of 2005
compared to $161.2 million during last year's first quarter. During the first
quarter of 2005, the Company made a voluntary cash contribution of $102.3
million to post-retirement health care trusts to pre-fund retiree benefits.
This contribution allows the investment earnings to grow tax free within the
trusts.

Stock Repurchase

The Company repurchased 2.9 million shares of its common stock at a cost of
$175.8 million during the first quarter of 2005.

Shipment Guidance

Harley-Davidson is revising its previous guidance and now plans to ship
329,000 Harley-Davidson motorcycles in 2005. This 329,000 unit target
represents a 3.7 percent growth rate over 2004 shipments. The Company
believes that this 10,000 unit reduction will occur almost entirely in the
second quarter and will involve reducing planned production of 2005 Model Year
motorcycles. Revised quarterly shipments are expected to be as follows:
77,000 units in the second quarter, 87,500 units in the third quarter and
87,500 units in the fourth quarter.

Company Background

Harley-Davidson, Inc. is the parent company for the group of companies doing
business as Harley-Davidson Motor Company, Buell Motorcycle Company and
Harley-Davidson Financial Services. Harley-Davidson Motor Company, the only
major U.S.-based motorcycle manufacturer, produces heavyweight motorcycles and
offers a complete line of motorcycle parts, accessories, apparel, and general
merchandise. Buell Motorcycle Company produces sport motorcycles. Harley-
Davidson Financial Services provides wholesale and retail financing and
insurance programs to Harley-Davidson dealers and customers.

Forward-Looking Statements

The Company intends that certain matters discussed in this release are
"forward-looking statements" intended to qualify for the safe harbor from
liability established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such because
the context of the statement will include words such as the Company
"believes," "anticipates," "expects," "plans," or "estimates" or words of
similar meaning. Similarly, statements that describe future plans,
objectives, outlooks, targets, guidance or goals are also forward-looking
statements. Such forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
anticipated as of the date of this release. Certain of such risks and
uncertainties are described below. Shareholders, potential investors, and
other readers are urged to consider these factors in evaluating the forward-
looking statements and cautioned not to place undue reliance on such forward-
looking statements. The forward-looking statements included in this release
are only made as of the date of this release, and the Company undertakes no
obligation to publicly update such forward-looking statements to reflect
subsequent events or circumstances.

The Company's ability to meet the targets and expectations noted depends
upon, among other factors, the Company's ability to (i) continue to realize
production efficiencies at its production facilities through the
implementation of innovative manufacturing techniques and other means, (ii)
successfully implement production capacity increases in its facilities, (iii)
successfully introduce new products and services, (iv) avoid unexpected supply
chain issues, (v) sell all of the Harley-Davidson motorcycles it plans to
produce, (vi) continue to develop the capacity of its distributor and dealer
network, (vii) avoid unexpected changes in the regulatory environment for its
products, (viii) successfully adjust to fluctuations in foreign currency
exchange rates, interest rates and commodity prices, (ix) adjust to worldwide
economic and political conditions, and (x) successfully manage the credit
quality of HDFS's loan portfolio.
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  #6  
Old 13th April 2005
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The price is pretty reasonable now but I wouldn't mortgage the farm for it. Every dog has it's day. HDI has had a very long successful run from the '80s to now. Microsoft is another one that seems to have run it's course.
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  #7  
Old 13th April 2005
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I've been saying for years that after 2003 HD will drop in value and after a few years all those $30,000 bikes will be worthless

I still say that within 10 years of the 100th sportys will be dime-a-dozen bikes again and used b/t will go for next to nothing

oh , all you people that bought 03s as an investment... your outta luck , they made more 03s than all the shovelheads made from 66-the start of the evo
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  #8  
Old 13th April 2005
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Quote:
Originally Posted by flathead45
oh , all you people that bought 03s as an investment... your outta luck , they made more 03s than all the shovelheads made from 66-the start of the evo
Agree, but then again, I never bought a bike as an investment. I bought it to ride!
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  #9  
Old 13th April 2005
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The only '03s that will be worth anything are the ones that are never ridden. But then again, there are probably quite a few of them too.
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  #10  
Old 13th April 2005
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I may take heat for saying this....but GOOD. The reason that these dealers have been able to GOUGE us for so long on the USED as well as the new bikes is because the production was below the demand. The mere thought of walking into a stealership and seeing a price tag that is $2000 over what that particular used bike cost 15 years ago is sickining. I truely look forward to the day when we can walk into a stealer and LAUGH at the sticker and tell THEM to knock 3 or 4 grand off it and "maybe" I'll buy it. Harley has been sticking it too us for quite a while now and we still come back for more. I hope this gives them a reason to start treating us as consumers instead of suckers. Sorry, I know I sound negitive, but I got horrible treatement back in '96 when I tried to buy a new dyna glide and had I not had some close friends at Illinois Harley, I would have gone for the waiting list ride that most people took. As I have posted in previous posts that circumstances just don't dictate the funds for a BT at this point in my life, but to think that a 10 year old EVO softail is still worth more than a brand new 1200 rubber mount sportster really chapps my butt. Sorry again, off of soapbox now.
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