Harley projecting 201,000 to 212,000 bike shipments to dealers in 2010

Harley-Davidson’s fourth quarter and full year financial results reveal that the company has seen full year income from “continuing operations” drop to $4.29 billion in 2009 against $5.58 billion in 2008.

Including its MV Agusta discontinued operations, Harley is reporting a $55.1 million full-year loss, with the restructuring-impacted fourth quarter loss of $218.7 million taking the annual performance into negative territory for the first time in more than two decades.

Compared to its 5.58 billion revenue in 2008, the company is down 23.1 percent in revenue terms for the year, with fourth quarter revenue down a whopping 40.2 percent to 764.5 million from 1.28 billion for the final quarter of 2008.

Harley President/CEO Keith Wandell remains “confident we have made the right decisions for our future” saying that “these actions are critical to restoring greater profitability and long-term growth to Harley-Davidson.”

Wandell cites some $224 million of restructuring charges impacting the 2009 results, but the company is now saying that, in total, its restructuring is estimated to cost between $430 and $460 million going into 2010, which includes some $175 to $195 million that will work through its books this year.

Harley says that it is ultimately anticipating annual ongoing savings arising from restructuring of between $240 and $260 million a year, with some $135 to $155 million savings anticipated in 2010.

In the fourth quarter of 2009, revenue from Harley-Davidson motorcycles was down 45.6 percent over the final quarter of 2008 at $552 million on a huge 53.1 percent drop in motorcycle shipments to its worldwide dealer network, at 35,938, which is at the lower end of prior guidance. Parts and Accessories though were only down 4.9 percent for the quarter, with General Merchandise only off 3.2 percent.

For the full year, motorcycle revenue was down to $3.17 billion from $4.12 billion in 2008, with motorcycle shipments down to 223,023 for the year, against 303,479 for 2008.

For this year Harley is now saying it anticipates shipments to be in the range 201,000 to 212,000, which would be a reduction of between five and ten percent, giving some credence to off-the-record reports from within the company that the general feeling is that having planned the hits it is taking to deal with the impacts of the downturn, this year should see demand for the firm’s motorcycle broadly stabilize by the end of the year.

In market share terms, the company continues to perform better relative to market decline internationally than at home. Harley says that its full-year decrease in motorcycle sales (in its 651+cc heavyweight sector) represents a 22.7 percent decline worldwide, with 25.8 percent decline domestically, and 15.4 percent in international markets.

There does appear to be some continuing evidence that Harley is outperforming the market, with on-highway motorcycle sales for the domestic US market as a whole (all displacements) down over 40 percent for the year, and evidence to support the “stabilization” theory.

Compared to the full-year performance, final quarter retail sales of Harley-Davidson motorcycles declined “just” 27.9 percent (domestic 651+cc), despite its reported greater than 50 percent year-on-year reduction in shipments to dealers (suggesting that some supply/demand equilibrium is on the horizon) with final quarter international retail sales down 10.3 percent only in international markets.

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