Harley-Davidson is building a factory in Thailand as the company looks to better serve its international customers, the motorcycle maker announced Tuesday. Read The Full Story Here: Harley-Davidson Will Build a Factory in Thailand
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With U.S. sales still in a slump, Harley-Davidson’s profits are sputtering.
The motorcycle maker, which is struggling to attract Millennial buyers, said Tuesday that its profit fell 40% in its third fiscal quarter to $68.2 million.
On a per share basis, the company earned 40 cents, down from 64 cents a year earlier.
The results met Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was also for earnings of 40 cents per share.
Harley reported $1.15 billion in revenue, down about 9% from the third quarter of 2016.
The company said its worldwide retail motorcycle sales fell nearly 7%, primarily because of its U.S. slump.
“The continued weakness in the U.S. motorcycle industry only heightens our resolve and the intensity we are bringing to the quest to build the next generation of Harley-Davidson riders,” CEO Matt Levatich said in a statement.
The Milwaukee-based company’s stock was up 0.5% in pre-market trading to $46.80.
Entering Tuesday, Harley-Davidson shares had decreased 20% since the beginning of the year, while the Standard & Poor’s 500 index had climbed 14%. The stock had fallen 6.5% in the last 12 months.
Growth overseas has somewhat helped offset the decline in the U.S. motorcycle market. But Harley’s international sales were also down in the recent quarter, hurt by weak performance in Japan, Australia and Mexico.
In May, the company upset its unionized workforce when it announced plans to operate a motorcycle assembly plant in Thailand.
Harley said the plant was necessary for the Asian market, partly because the Thailand tariff on motorcycles assembled in the U.S. is about 60%.
Union officials argued it would take work from the United States and that it was one of multiple steps the company had taken to weaken its unionized workforce.
Temporary furloughs are expected at the U.S. plants this fall, including the Menomonee Falls, Wis. plant that employs about 1,000 production workers.
The company also said earlier that it was eliminating about 180 production jobs, with the Menomonee Falls and Kansas City locations expected to be hit the hardest.
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