Harley-Davidson falls on second-half outlook
Tuesday, July 13, 1999 02:27 PM
CHICAGO, July 13 (Reuters) - Shares of motorcycle maker Harley-Davidson Inc. (Nyse:HDI) fell sharply on Tuesday after the company's management tempered its outlook for the second half of the year, analysts said.
"They gave us some guidance for a more conservative second half versus the first half," said Cynthia Hatstadt, an analyst with BancBoston Robertson Stephens.
In morning trade, shares of Harley-Davidson fell as much as 4-3/16 before recovering somewhat. Harley-Davidson was trading off 2-3/16 at 60 in the late morning.
On a conference call with analysts Tuesday morning, Harley- Davidson management said it expects higher operating costs in the second half, analysts said.
"Basically, what they did is guide operating expenses higher for the second half of the year," said Timothy Conder, analyst with A.G. Edwards.
Analysts said the premium motorcycle maker was planning one of its largest new product launches on August 1 and would also spend more to support its Buell Brand sport motorcycle brand following a recall of about 18,637 motorcycles in May.
Analysts also said the morning's stock losses could be linked to profit taking following the company's second quarter earnings report late on Monday.
"Earnings were very strong," Hatstadt said. "I think everyone was expecting good numbers, so that's why we're probably seeing some profit-taking today."
Late on Monday, Milwaukee, Wis.-based Harley-Davidson reported second quarter earnings of $0.44 a diluted share, versus $0.36 in the year-ago period.
That figure also exceeded the analysts' consensus of $0.43 cents a share, according to First Call, which tracks such estimates.
In its earnings report, Harley-Davidson said it raised its 1999 production target to 172,000 motorcycles from 168,000.
© 1999, Reuters
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