Harley-Davidson's third-quarter earnings beat Wall Street expectations as the company reduced expenses and boosted international sales, sending profit surging 67 percent to $113.9 million.
The company earned 68 cents a share during the quarter, compared with 53 cents a share projected by analysts, according to average estimates compiled by Refinitiv, formerly Thomson Reuters.
Revenue was $1.32 billion, compared with $1.15 billion in the same quarter of 2017. Analysts had expected revenues of $1.07 billion.
"As we manage our business with resilience in a challenging time in our history, we are leveraging our strengths for a more promising road ahead.," said Matt Levatich, president and chief executive officer. "We are investing to build the next generation of Harley-Davidson riders and we are optimizing our business to drive profitability and cash flow. Through September, cash flow was very strong and revenue was up over 3 percent despite lower motorcycle shipments."
The company continues to expect to ship 231,000 to 236,000 motorcycles total in 2018, with about 45,800 to 50,800 shipping in the fourth quarter.
Harley's stock has fallen by almost 24 percent so far this year, closing at $38.73 a share Monday. It's struggled to gain traction with younger riders, and even Baby Boomers are starting to trade in its traditional "hogs" for lighter motor bikes, analysts say.
CEO Matt Levatich rolled out an aggressive "more roads to Harley" growth plan in July that includes an expanded lineup of lighter motorcycles, smaller urban retail stores, a new digital strategy and an international push as U.S. sales fall.
The Wisconsin-based company plans to launch by 2020 a new platform of 500 cc to 1250 cc middleweight bikes and an even smaller bike for emerging markets in Asia. The biggest Harley engines run at around 1,700 cubic centimeters and weigh more than 1,000 pounds — making the new lineup a significant departure from its signature HOGs.
The company came under fire from President Donald Trump during the quarter. He criticized Harley after it announced plans in June to move its European market production out of the U.S. because of retaliatory tariffs from the European Union.
BMO Capital Markets said the company's traditional "hogs" have fallen out of favor with riders, who are trading them in for Indian motorcycles, another heritage motorcycle brand owned by Polaris and one of Harley's main competitors.
Separately, Harley-Davidson said it is issuing a voluntary safety recall for a hydraulic clutch assembly on all model year 2017 and 2018 Touring, Trike, and CVO Touring models as well as some 2017 Softail models. The recall affects about 238,300 motorcycles worldwide and will cost the company about $35 million.
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