Harley-Davidson, the iconic motorcycle manufacturer, announced a surprising surge in second-quarter earnings on Thursday, despite a backdrop of tough market conditions. In the Harley-Davidson Motor Company segment, the company reported a revenue increase to $1.35 billion for the quarter ending on June 30, up from $1.2 billion in the same timeframe last year.
This revenue not only surpassed the $1.27 billion average forecast provided by analysts on Capital IQ but also underscored a 16% increase in global motorcycle shipments. However, amidst this growth, worldwide retail motorcycle sales faced a decline of 3%. Overall consolidated revenue for Harley-Davidson climbed to $1.62 billion, an increase from $1.45 billion year-over-year.
The company's financial services, through Harley-Davidson Financial Services, showcased a robust growth of 10%, hitting $263.5 million. Nonetheless, the Livewire division, which focuses on electric motorcycles, faced a downturn, with revenue dipping by 8% to $6.4 million. In terms of earnings, the GAAP earnings per share saw a commendable rise to $1.63, compared to $1.22 in the same period of the previous year, also outperforming the Capital IQ consensus of $1.38.
Following this announcement, shares of Harley-Davidson surged by 6.7% during midday trading. Chief Executive Jochen Zeitz expressed his satisfaction with the second quarter's performance, noting, "Despite a challenging market, we are pleased with our second quarter performance, in which we grew our US market share in a declining market, with notable unit growth of more than 11% in the important core category of touring." Looking ahead, Harley-Davidson has adjusted its revenue expectations for fiscal 2024, now projecting a decrease of 5% to 9% in its core segment.
This is a downward revision from the forecast made back in April, which suggested that revenues would remain flat or decrease by up to 9%. Additionally, the guidance for the division's operating margin has been adjusted to a range of 10.6% to 11.6%, down from the previous 12.6% to 13.6%. In terms of financial services, the company continues to forecast operating income to be flat or increase up to 5% year-over-year, along with projected LiveWire electric motorcycle sales estimated between 1,000 to 1,500 units.
Management plans to maintain its focus on the five-year 'Hardwire' strategic plan launched in 2021, emphasizing objectives related to cost efficiency and productivity enhancements, according to Zeitz..