Harley-Davidson Inc. on Thursday said that it will cut motorcycle production and slash about 730 jobs as the sluggish U.S. economy slows demand for its iconic motorcycles.
The Milwaukee-based motorcycle manufacturer also reported that it expects full-year per-share earnings to drop as much as 20 percent.
First-quarter net income for Harley-Davidson (NYSE: HOG) slid 2.5 percent to $187.6 million compared with $192.3 million for the same period a year ago. Earnings per share in the quarter were 79 cents, a 6.8 percent increase compared with 74 cents for the year-ago period. Per-share results rose because of stock repurchases.
Revenue for the quarter was $1.31 billion, compared to $1.18 billion in the year-ago quarter, a 10.8 percent increase.
U.S. retail sales of Harley-Davidson motorcycles were down 12.8 percent in the first quarter. Jim Ziemer, Harley-Davidson's CEO called the results "disappointing," but said that Harley-Davidson's U.S. dealers outperformed the heavyweight motorcycle industry, which was down 14 percent.
Harley plans to ship 23,000 to 27,000 fewer motorcycles in 2008 than in 2007, resulting in total planned 2008 shipments of between 303,500 and 307,500 units.
"We've said on a number of occasions that we would closely monitor the retail environment and regularly assess our wholesale shipment plans and remain committed to shipping fewer Harley-Davidson motorcycles to our worldwide dealer network than we expect they will sell this year," Ziemer said.
Ziemer said the shipment reduction will occur through temporary plant shutdowns and adjustments to daily production rates. The company did not provide any further details on the plant shutdowns.
About 370 hourly production workers and 360 non-production employees will lose their jobs over the next several months as a result, Ziemer said.
For 2008, the company expects earnings per share to decrease between 15 and 20 percent compared with 2007, resulting in expected earnings per share of $3 to $3.18.
The company expects to ship between 76,000 and 80,000 Harley-Davidson motorcycles in the second quarter of 2008.
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Harley-Davidson to cut jobs, ship fewer motorcycles - Wichita Business Journal:
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