Tuesday, November 04, 2008

Credit Crunch Flattens Growth at Harley-Davidson

Shipments of Harley-Davidson (HOG-$23.89) motorcycles totaled 74,704 units for the third-quarter ended September 30, a decrease of 11,831 units or 13.7 percent compared to last year's third quarter. Deteriorating economic conditions are also adversely impacting credit results at Harley-Davidson Financial Services (HDFS), according to the recent FORM 10-Q regulatory filing:

Annualized losses on HDFS’ managed retail motorcycle loans were 1.97% during the first nine months of 2008 compared to 1.65% during the first nine months of 2007. The 30-day delinquency rate for managed retail motorcycle loans at September 28, 2008 increased to 5.59% from 4.91% at September 30, 2007. Managed retail loans include loans held by HDFS as well as those sold through securitization transactions. The increase in losses was primarily due to a higher incidence of loss resulting from an increase in delinquent accounts. The Company expects that HDFS will continue to experience higher delinquencies and credit losses as a percentage of managed retail motorcycle loans in 2008 as compared to 2007.

Going forward, Chief Executive Officer Jim Ziemer expects the global economy and consumer concerns to continue to create challenges for Harley-Davidson through year-end and into 2009. The company has narrowed its shipment expectations to 303,500 to 306,000 Harley-Davidson motorcycles for the fourth-quarter.

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

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