Harley-Davidson’s Q1 profit falls over chip shortages and rising costs

By Akshay Kedari  | Date: 2022-04-29

Harley-Davidson’s Q1 profit falls over chip shortages and rising costs

Harley-Davidson Inc. reportedly saw a downturn in profit for the first quarter, owing primarily to chip shortages and rising costs despite an uptick in sales. The company's stock price was down 1.2%, trading at USD 36.20 on the New York Stock Exchange (NYSE).

The bike manufacturer stated that it expects the issue of rising raw material and logistics costs to continue throughout the year, but they are unconcerned because consumer demand for their bikes is as compelling as ever.

It is worth noting that the worldwide shortage of semiconductors has radically widened the pressure on profitability for numerous companies, and in the case of Harley-Davidson, it is pressing the company to sustain its outlook for an already massive backlog of motorcycle orders.

Jochen Zeitz, the CEO of Harley-Davidson, stated that they are upbeat about the presumed improvements in the microchip arena expected in the second half of the year but are cautious in making firm predictions.

According to sources, sales of motorcycles and related divisions rose by 6% to USD 1.3 billion, with the parts and accessories segment growing by 11%. In the first quarter of 2022, the company's net profit was USD 223 million, or USD 1.45 per share, over USD 259 million, or USD 1.68 per share recorded in the same period the previous year.

Gina Goetter, the Chief Financial Officer at Harley-Davidson, claimed that a bike model used to camp on the showroom floor in the United States for approximately 10 weeks in 2019, but that has significantly plummeted to less than two weeks, indicating the firm's fast-running bookings.

Interestingly, the corporation's revenue increased by 5% to USD 1.50 billion, with the motorcycle segment increasing by 1% to USD 1.3 million from USD 1.2 million the previous year. This can be attributed to the company's global price surcharges, which have largely contributed to compensating input costs.

Source credit:

https://money.usnews.com/investing/news/articles/2022-04-27/harley-posts-lower-profit-on-supply-chaos-rising-costs

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Akshay Kedari     aeresearch.net

Akshay Kedari

A qualified computer engineering graduate, Akshay Kedari takes pride in having his way with words. Following his passion for content creation, he writes insightful pieces on aeresearch.net and a few other portals. Also endorsed with a short-term experience in web deve...

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