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Earnings show Harley's roar not what it once was

York Dispatch staff
The Harley-Davidson York plant.
Wednesday, May 15, 2019.
John A. Pavoncello photo

Sales of Harley-Davidson Inc. motorcycles in the United States dipped for the 12th consecutive quarter, according to the company's report to shareholders covering the fourth quarter of 2019.

Harley-Davidson's stock price dropped Tuesday after its fourth-quarter earnings missed Wall Street's expectations. Its stock prices had partially recovered as of 1:30 p.m. Wednesday, up 1.18% from the day's opening. 

Harley-Davidson operates an assembly plant at 1425 Eden Road in Springettsbury Township.

The company said U.S. bike sales were down 3.1% in the quarter and 5.2% for the year, and international sales were up 0.5% in the quarter but down 3% for the year.

Overall, Harley-Davidson reported sales were down 1.4% in the quarter and 4.3% for the year. Canada had the steepest decline among individual countries, off 14.1% in the quarter, while the Asia-Pacific region saw a 6.2% improvement, the company said. 

In the fourth quarter, Harley-Davidson reported earnings of $13.5 million, or 9 cents per share, compared with $495,000, or effectively zero cents per share, over the same period of 2018.

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Harley-Davidson reported $1.07 billion in revenue in the quarter compared with $1.15 billion in the same period in  2018, as U.S. sales continued to nosedive.

The company is "continuing to struggle with declining sales, but it continues to generate respectable free cash flow, and shares appear fairly valued at the low end of their historic P/E range," analyst Garrett Nelson said in a note to Harley-Davidson shareholders.

The company is attempting to reposition itself in the market with its line of electric bikes. Harley CEO and president Matt Levatich called 2020 a "pivotal year" for the company's rebranding efforts. 

Overall, the company reported earnings of $423.6 million last year, down from $531.5 million in 2018. Officials said the cost per share fell to $2.68, down from $3.19 the year before. 

Harley-Davidson is projecting revenue sales from motorcycles to be in the range of $4.53 billion to $4.66 billion this year, compared with $4.57 billion in 2019.