Harley Davidson reports earnings tomorrow - may have comments about MV Agusta - MVAgusta.net
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post #1 of 1 (permalink) Old 04-19-2010, 02:32 PM Thread Starter
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Harley Davidson reports earnings tomorrow - may have comments about MV Agusta

This is from a widely read news service. I bolded and italicized the areas I thought important, which is what I'll be listening for tomorrow to see if there are any clues about the future of MV Agusta.

By the way, it's interesting that there is some speculation that a buyout firm (KKR) may be interested in Harley Davidson - that would not be a good sign about how long Harley is willing to hold onto MV Agusta. It's also very surprizing since Warren Buffet made a significant investment into Harley during the financial meltdown over the last year or so.

MV Agusta may be a great deal for the next buyer. According to SEC documents that HD filed earlier this year, HD paid over $200 million for MV. They now value the entire operation at $110 million. That's quite an investment to write off in a short time. Whoever buys MV next hopefully will have the benefit of some of that investment.

Here is the report:

Harley-Davidson (HOG) is expected to report Q1 earnings before the market open on Tuesday, April 20 with a conference call scheduled for 9:00 am ET.

Analysts are looking for a profit of 24c on revenue of $1.02B. The consensus range is 3c-39c for EPS, and revenue of $914.3M-$1.21B, according to First Call. In January, the company forecast motorcycle shipments down 5%-10% for FY10, and said it expects to ship 201,000-212,000 motorcycles this year. CEO Keith Wandell noted that the company expects 2010 will continue to be a challenging year. Harley-Davidson was also the subject of LBO speculation this quarter, and Breakingviews said Kohlberg Kravis was named as a potential suitor. Breakingviews believes the idea of KKR or another buyout firm looking into Harley-Davidson "isnít entirely crazy."
Analyst Views

Harley-Davidson shares were recently downgraded to Hold from Buy at Deutsche Bank. The firm says that while the stock's long-term valuation is still "reasonable," further upside requires a "meaningful" recovery in motorcycle demand; the firm believes motorcycle demand will remain at 2009 levels "for some time." A growth driver could be an improvement in Harley's Financial Services unit, or higher than forecast proceeds from the sale of MV Augusta.

"When in doubt - hit the throttle, you'll either solve the problem or remove the suspense."
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