Harley-Davidson is selling more motorcycles and increasing its income, but an executive said the company's position will improve even more after restructuring is completed at its York manufacturing operation.
Worldwide retail sales of new Harley-Davidson motorcycles grew 3.5 percent in the first quarter of 2011, and income from continuing operations increased by 73.5 percent, the company announced in an earnings report Tuesday.
First-quarter income from continuing operations was $119.3 million, or 51 cents per share, compared to $68.7 million, or 29 cents per share, for the first period of 2010.
The company attributed the high performance to operating income from its financial services division, which grew 154.6 percent compared to the first quarter of 2010.
Operating income from motorcycles and related products was flat, impacted by inefficiencies related to restructuring and the implementation of a new operating system at the Springettsbury Township plant and other Harley facilities.
The company is trimming staff and working the advantages of new labor agreements locally and at plants in Wisconsin and Kansas.
In York: The York restructuring includes a building consolidation plan to shrink the company's footprint and make operations more efficient at its Springettsbury Township campus.
"Our entire team remains focused on transforming our company to be leaner, more agile and more effective than ever at delivering great products and experiences to an increasingly global community of customers," CEO Keith Wandell said in the earnings release.
He said he expects to continue to see an impact on financial performance in the coming quarters as the changes continue. When the restructuring is finished next year, the company will "have a best-in-class, flexible, lean operating structure that we expect will yield substantial ongoing savings," he said.
Sales report: Worldwide, first-quarter new motorcycle sales grew 3.5 percent. Dealers sold 17,904 new bikes in international markets, an 11.3 percent increase compared to last year's first quarter.
U.S. sales were down 0.5 percent, to 31,691.
Revenue from motorcycles was $833.4 million, up 3 percent compared to the same period of 2010.
Revenue from parts and accessories was $164.3 million, up 10.2 percent. Revenue from general merchandise and apparel was $62.6 million, down 5.6 percent.
Anticipating a supply chain interruption because of the earthquake and tsunami in Japan last month, the company widened its full-year shipment guidance. Harley has some suppliers in Japan.
The company had projected it would ship between 221,000 and 228,000 motorcycles in 2011, but it revised that number to between 215,000 and 228,000 bikes.
- Reach Christina Kauffman at 505-5436, ckauffman@yorkdispatch.com, or follow her on Twitter at @dispatchbizwiz.
