Harley-Davidson (HOG) Earnings Quality?
Harley-Davidson (HOG) reported earnings today and the stock leapt 13%. You can view the presentation here [pdf].
Just like MGM in the first quarter, HOG is surprising us in the second quarter with worldwide retail sales down 5.5% year-over-year and U.S. retail sales down 8.4% y-o-y! Operating margin for the motorcycle segment Q2 2010 was was $158 million, down from $174 million.
Worse than second quarter 2009!
It looks like most of the earnings "surprise" came from a lower loan loss provision on the $5.6 billion in retail "finance receivables," i.e. motorcycle loans. Even though 4.5% of that book of loans is 30+ delinquent.
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2 comments:
true. yet you failed to mention the improvements in HOG's financial services sector - H-D posted operating income of 61 million compared to 91 million loss one year ago.
There was not necessarily any improvement, most of the benefit came from lowering the loan loss provision.
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