Harley-Davidson first-quarter 2015 diluted earnings per share increased 5 percent to $1.27 compared to diluted EPS of $1.21 in the year-ago period.
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Net income was $269.9 million on consolidated revenue of $1.67 billion compared to net income of $265.9 million on consolidated revenue of $1.73 billion in last year's first quarter.
In the first quarter of 2015, worldwide retail sales of new Harley-Davidson motorcycles decreased 1.3 percent compared to last year's first quarter. Dealers worldwide sold 56,661 new Harley-Davidson motorcycles in the first quarter of 2015 compared to 57,415 motorcycles in the year-ago quarter.
In the U.S., dealers sold 35,488 new Harley-Davidson motorcycles in the quarter, down 0.7 percent compared to sales of 35,730 motorcycles in the year-ago period. The company believes increased, aggressive competitive motorcycle discounting was among the factors adversely affecting first-quarter U.S. retail Harley-Davidson sales.
In international markets, dealers sold 21,173 new Harley-Davidson motorcycles during the quarter compared to 21,685 motorcycles in the year-ago period, with unit sales down 1.1 percent in the Asia Pacific region and 5.6 percent in the EMEA region and up 0.3 percent in the Latin America region and 5.7 percent in Canada.
The company now expects motorcycle shipments to grow approximately 2 percent to 4 percent in 2015, compared to its previous forecast of approximately 4 percent to 6 percent shipment growth.
Operating income for the Motorcycles and Related Products segment (the Motorcycles segment) was $345.5 million in the first quarter of 2015 compared to operating income of $347.7 million in the year-ago period. Operating income in the quarter was primarily impacted by unfavorable foreign currency exchange, partially offset by strong productivity gains.
Revenue from sales of motorcycles to dealers and distributors was $1.26 billion, compared to revenue of $1.31 billion in the year-ago period. The company shipped 79,589 motorcycles worldwide during the quarter compared to shipments of 80,682 motorcycles in the year-ago period.
Revenue from motorcycle parts and accessories was $183.9 million during the quarter compared to $198.1 million in the year-ago period. Revenue from general merchandise, which includes MotorClothes® apparel and accessories, was $66.4 million compared to $64.1 million in the year-ago period.
Gross margin for the Motorcycles segment was 39.1 percent in the first quarter of 2015 compared to 37.7 percent in the first quarter of 2014. First-quarter operating margin for the Motorcycles segment was 22.9 percent compared to operating margin of 22.1 percent in last year's first quarter.
Operating income from financial services was $64.7 million in the first quarter of 2015 compared to $63.2 million in last year's first quarter. First-quarter financial services results reflect favorable net interest and higher non-lending income, partially offset by increased provision for credit losses.
Harley-Davidson is revising its full-year guidance for motorcycle shipments, reflecting its commitment to manage supply in line with demand, and now expects to ship 276,000 to 281,000 motorcycles to dealers and distributors worldwide in 2015, an approximate 2 percent to 4 percent increase from 2014.
The company previously had provided full-year shipment guidance of 282,000 to 287,000 motorcycles. In the second quarter, the company expects to ship 83,000 to 88,000 motorcycles, compared to 92,217 motorcycles shipped in the year-ago period. The company continues to expect full-year 2015 operating margin of approximately 18 to 19 percent for the Motorcycles segment.
The company also continues to expect 2015 capital expenditures for Harley-Davidson, Inc. of $240 million to $260 million.
Cash and marketable securities totaled $1.23 billion at the end of the first quarter, compared to $1.03 billion in the year-ago quarter. In the first quarter of 2015, Harley-Davidson generated $174.7 million of cash from operating activities, compared to $203.6 million in the first quarter of 2014.
On a discretionary basis, the company repurchased 2.9 million shares – or $182.5 million - of Harley-Davidson, Inc. common stock during the first quarter of 2015.
In the first quarter of 2015, there were approximately 211.8 million Harley-Davidson weighted-average diluted common shares outstanding, compared to approximately 220.5 million shares in the year-ago quarter. At the end of the first quarter, 18.6 million shares remained on board-approved share repurchase authorizations. ■