(Reuters) – Harley-Davidson Inc on Tuesday reported worse-than-expected quarterly profit and forecast sharply lower shipments, sending its stock tumbling more than 8 percent.

The logo of U.S. motorcycle company Harley-Davidson is seen on one of their models at a shop in Paris, France, August 16, 2018. REUTERS/Philippe Wojazer

The motorcycle maker also said it is boosting investment at its Thailand plant to serve European markets as it tries to fight the fallout from U.S. President Donald Trump’s tariff war.

Harley announced its Thailand decision on Tuesday, hours after the motorcycle maker reported a fourth straight year of decline in worldwide sales. The company has been struggling to revive demand in the United States, which accounts for nearly 60 percent of total sales.

Harley said tariffs alone, including the import duties imposed by the European Union on its motorcycles, will cost between $100 million and $120 million in 2019 and contribute to a 6 percentage point fall in operating margins in the first quarter of this year.

Operating margins in the quarter declined 6.2 percentage points, in part due to the tariffs. Operating margins measure how much profit a company makes on a dollar of sales.

The Thailand facility, which started operating last year, was primarily intended to serve southeast Asian and Chinese markets. The company will invest $15 million to expand and shipments to Europe will begin by the end of 2019, Harley said.

The decision to shift production out of the United States for European markets was announced last summer after the EU slapped tariffs on U.S. imports in response to Trump’s duties on steel and aluminum imports from the trading bloc.

Trump had blasted Harley’s decision and publicly backed a boycott of the company.

The company expects to ship up to 222,000 motorcycles globally in 2019, its lowest since 2010.

It reported an adjusted profit of 17 cents per share in the quarter while analysts surveyed by Refinitiv, on average, expected 28 cents.

Global retail sales fell 6.1 percent year on year. In the United States, sales dropped 10.1 percent in the latest quarter, more than the 8.3 percent decline expected by analysts.

The stock slid 8.3 percent to $33.58. Shares of the Milwaukee, Wisconsin-based company have fallen about 30 percent since the beginning of 2018.

Reporting by Rajesh Kumar Singh in Chicago and Ankit Ajmera in Bengaluru; Editing by Chizu Nomiyama and Jeffrey Benkoe


Source link

قالب وردپرس