Harley-Davidson updates guidance as result of strike
Harley-Davidson, Inc. (NYSE: HOG) announced today that it is updating guidance for motorcycle shipments for the first quarter of 2007 and financial guidance for the full year. Guidance is being revised to reflect the impact of a three week strike that concluded Thursday, February 22, 2007, at the Company’s manufacturing facility in York, Pa. Full production at the Pennsylvania and Wisconsin plants is expected to resume over the next week. In all, the strike will result in a loss of approximately one month’s production.
"While we are pleased to have reached an agreement with our unionized employees in York, a disruption of this magnitude has a significant impact on our business, as well as our suppliers, dealers, employees and our retail customers," said Tom Bergmann, Chief Financial Officer.
"Although the recovery process has begun, the immediate impact will be a reduction in our first quarter Harley-Davidson(R) motorcycle shipments from our previous guidance of 82,000 - 84,000 units, to revised guidance of 64,000 - 66,000 units. We expect to make up approximately 4,000 - 5,000 of these motorcycles during the remainder of the year resulting in full year shipment plans for approximately 14,000 fewer motorcycles than we originally planned. This decision was made after carefully evaluating our production constraints, supply chain issues, cost implications, timing of shipments to dealers, and the delayed start of 2008 model year production caused by the strike," said Bergmann.
For the full year 2007, Harley-Davidson now expects moderate revenue growth, lower margins, and earnings per share (EPS) growth in the range of 4 - 6 percent compared to 2006. The Company expects its EPS growth rate to return to 11 - 17 percent in 2008 and 2009.