Harley Davidson reports 32% rise in Topline, beat estimates

Revenue increase - The revenue for Harley Davidson in Q4 was up by 32%, driven by growth in Motorcycles and Related Products segment (HDMC) revenue resulting from stronger unit sales and mix. The revenue for Q4'21 was $1,016 million compared to $725 million in Q4'20.

Net Income - The net income for Q4 was $22 million compared to a loss of $96 million in Q4'20. Consolidated net income in the fourth quarter reflects the Record Financial Services segment (HDFS) operating income offsetting HDMC operating losses in the seasonally slow quarter.

Segment-wise breakdown:

Motorcycles and Related Products segment: Total revenues from this segment, which constitute the bulk of the company's overall revenues, jumped 54% on a year-over-year basis to $816 million. The segment’s operating loss narrowed from $196 million to $102 million in the December quarter. In Q4, revenues from the sale of motorcycles came in at $546 million, increasing 71% YoY. The company shipped 29,100 motorcycles worldwide, up 39%. Harley-Davidson retailed 34,000 motorcycle units globally, up 2% YoY. Its retail motorcycle units sold in North America grew 8% to 19,600. Meanwhile, sales in the EMEA (Europe, Middle East, and Africa), Asia Pacific, and Latin America declined 7%, 2%, and 16%, respectively, from the year-ago period.

Financial Services: Revenues for Harley-Davidson Financial Services totaled $200.4 million, up 3.2% YoY. It was higher than analysts' expectation of $199 million. Operating income jumped to $95.1 million from the $76.7 million because of lower interest expense. 

Outlook 2022 - For 2022, Harley-Davidson forecasts a decline of 20-25% in its operating income for Financial Services. Capital expenditure for the full year is projected within $190-$220 million.

The company expects revenues from the motorcycles segment to grow in the band of 5-10% in the current year. Harley-Davidson has also kept the operating income margin expectation for the segment intact at 11-12%.

Target price - The 7 analysts offering 12-month price forecasts for Harley-Davidson Inc have a median target of $46, with a high estimate of $70 and a low estimate of $40. 

The share price jumped by 15.53% on Tuesday and closed at $41.73 per share.