Shares of motorcycle maker, Harley-Davidson, Inc. (NYSE: HOG) were up as much as 14 percent from Monday’s closing price, in morning trading on Tuesday after the company announced a profit at its motorcycle financing unit and stabilizing motorcycle sales in the second quarter.
Harley-Davidson Financial Services, the business unit that gives loans to Harley customers and dealers posted operating income of $60.8 million in the quarter, up from a loss of $90.5 million in the same quarter last year. Harley’s net income for the three months ended June 27 was $71.2 million, or 30 cents per share, up from $19.8 million, or 8 cents per share in the same quarter a year ago. Excluding discontinued operations, profit was 59 cents per share. Analysts polled by Thomson Reuters expected profit of 41 cents per share, on average.
[–quote–]
Harley-Davidson’s second quarter revenue from motorcycles and related products was flat at $1.14 billion. Analysts expected revenue of $1.13 billion.
“Over the past year-and-a-half, we’ve taken many actions, from an operations standpoint, in marketing and product development at HDFS and in every aspect of our business to deal with the economy and focus our resources on long-term goals and priorities,” said CEO Keith Wandell in the company’s earnings call. “Harley-Davidson’s first half earnings from continuing operations were $0.89 a share. We saw continued improvement at HDFS and there was a further moderation in the retail sales decline for new Harley-Davidson motorcycle sales in the second quarter.”
The Milwaukee-based Harley-Davidson a major overhaul at the start of 2009 to cope with a shrinking market and an economic downturn that has undercut demand for its pricey, chrome-laden bikes. Sales of Harley motorcycles, whose prices range from $7,000 to $25,000 can take a big hit when the economy goes south. The company has been focused on cutting costs and streamlining its business. Last year, it announced the shutdown its Buell sport-bike line and said it planned to sell the Italian motorcycle maker MV Agusta. In December, the company and its union agreed to a cost-cutting contract at its main motorcycle plant in York, Pa., that involved layoffs for about half the company’s unionized work force there.
The next step in its restructuring plan comes this week, when Harley-Davidson executives begin negotiations with the company’s union in Wisconsin for a new contract. Wandell said the company is “not flexible” on its demands and reiterated that the company will move Wisconsin production elsewhere if it doesn’t get the cost-savings it wants, which include lower expenses at its powertrain factory in Milwaukee and its motorcycle components facility in Tomahawk, Wis.
Shares of drug maker Cypress Bioscience, Inc. (Nasdaq: CYPB) rallied as much as 41 percent from Friday’s closing price, in morning trading on Monday after hedge fund, Ramius offered to buy the company for about $154 million, or $4.00 a share in cash.
We first featured Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) on July 1, after the company announced a U.S. marketing deal for its obesity treatment, lorcaserin. Since then, shares have continued their climb, surging almost 20 percent in pre-market trading on Friday after it was announced that an FDA panel voted 9-7 against clearing a competing experimental weight loss drug developed by Vivus, Inc. for marketing in the U.S.
Shares of biofuels developer Verenium Corp. (Nasdaq: VRNM) surged as much as 86 percent from Wednesday’s closing price, in morning trading on Thursday after the company announced that BP (NYSE: BP) will pay $98 million for technology and facilities developed by Verenium.