Harley-Davidson (HOG) Stock Rises 15% on Back of Strong Q4 2021 Results

UTC by Tolu Ajiboye · 3 min read
Harley-Davidson (HOG) Stock Rises 15% on Back of Strong Q4 2021 Results
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Iconic motorcycle manufacturer Harley-Davidson recently posted its results for the fourth quarter, which saw an increase in revenue and stock price.

Harley-Davidson Inc (NYSE: HOG) saw a 15% stock surge following an increase in revenue and unexpected profit for the fourth quarter. The motorcycle manufacturer reported fourth-quarter 2021 adjusted earnings of 14 cents per share against the Zacks Consensus Estimate of a 41 cent loss. The 40% consolidated revenue increase for the quarter resulted from higher demand for its most expensive touring and cruiser motorcycles. The total value of motorcycle and related product sales for Harley-Davidson for the fourth quarter was $816 million. This trumped the $669 million sales consensus estimate for the Wisconsin-based company. Furthermore, Harley’s recent bottom line is also a vast improvement over its results from the year-ago quarter. Then, the company registered a loss of 63 cents per share on sales of $531 million.

Harley also posted a strong fiscal year, with motorcycle and related products revenue rising to $4.54 billion. In addition, the motorcycle manufacturer reported adjusted earnings of $4.21 a share. Both figures exceeded analysts’ expectations, which had it at earnings of $3.87 a share on motorcycle revenues of $4.4 billion.

Harley-Davidson Expects Revenue and Stock Price to Grow Even Further from Increased Motorcycle Sales

Following a better-than-expected result, Harley said that it is now expecting revenue growth of 5% to 10% in its motorcycle division. The motorcycle manufacturer continues to cater to its wealthier customer base too. Harley’s model mix features the large Cruiser, Trike bikes, and sold-out units of its Pan America model. These have all been instrumental in maintaining strong sales in its the United States and European markets. The Pan America 1250 special alone has a starting price tag of $19,999.

Given its increased positive sales outlook, Harley also has to contend with supply chain issues that have constrained production. During a conference call with investor analysts, company chairman, president, and chief executive officer, Jochen Zeitz said:

“It’s a question of supply, not a question of demand, the supply chain issues are not going away. In fact, they intensify going into the year.”

Harley stated that its goal is to operate in markets that provide the best opportunities to grow with the most profitable bikes. As a result, the motorcycle maker has intensified the production of some of its most expensive motorcycles. In addition, it also cut down its bike-model lineup by around 40%. Harley also pulled out of poorly performing international markets to focus on those where it experiences optimum sales. These include the aforementioned European and North American markets and some portions of the Asia-Pacific region.

For the recent quarter, Harley’s bike sales in North America, which is its largest market, increased by 8% from a year earlier. Furthermore, its Pan America adventure touring bike, which launched a year ago, is the number 1 selling bike in its category in North America.

According to Zeitz, “Harley-Davidson delivered a strong finish to the year.”

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