Yahoo Finance Why Harley-Davidson’s 1Q16 Earnings Triggered a Selling Spree
Harley-Davidson's Mixed 1Q16 Results: A Long and Winding Road
Harley-Davidson’s 1Q16 earnings
Harley-Davidson Motor Company (HOG) released its 1Q16 earnings on April 19, 2016. The company reported adjusted EPS (earnings per share) of $1.36 for the quarter, higher than analysts’ estimates of $1.29. This also reflects a 7.1% increase over the corresponding quarter in 2015.
However, everything didn’t go well for Harley-Davidson, and investors reacted negatively on Wall Street. First, let’s take a closer look at the stock market’s reaction to the company’s 1Q16 earnings before we explore the key reasons behind this reaction.
Market reacted negatively
In 1Q16, Harley-Davidson (HOG) outperformed other automakers and delivered a positive return of 13.1%. During this period, other automakers (XLY) such as Honda (HMC), General Motors (GM), and Ford (F) remained in negative territory. Honda fell 14.4%, GM was down 7.6%, and Ford posted a loss of 4.2% in the first quarter of fiscal 2016.
On the day of the earnings release, Harley’s stock closed with a loss of 2.5%. Investors reacted negatively to rising concerns over the company’s falling profitability and visible stagnation in sales. Despite higher-than-expected earnings for the quarter, the company was unable to protect its profit margins.
Notably, the heavyweight motorcycle pioneer is well-known for maintaining industry-leading margins that are much higher than other motorcycle manufacturers. Therefore, a fall in HOG’s margins may hurt investors’ sentiments and drive its stock lower.
Series overview
In this series, we’ll analyze Harley-Davidson’s (HOG) 1Q16 earnings report closely to find out what the company’s latest financial data conveys. This will include Harley’s 1Q16 revenues and margins.
We’ll also compare the company’s reported financial data with the analysts’ estimates to check how it has been able to perform against analysts’ expectations. We’ll also cover highlights from Harley-Davidson’s 1Q16 earnings conference call and what it means for investors.
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