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Harley-Davidson profit tops estimates on overseas sales

Harley-Davidson commands about half of the US big-bike market
Harley-Davidson commands about half of the US big-bike market

Harley-Davidson's profit topped Wall Street estimates for the sixth quarter in a row, as sales of its bikes overseas edged up.

However the company warned that new EU tariffs would squeeze its operating margins. 

International shipments rose 2.4% to 29,546 motorbikes in the quarter. 

The results come nearly a month after the motorbike maker, which has been at the centre of the brewing trade war between the US and the European Union, said it planned to shift production for European customers overseas to avoid EU tariffs.

The move has been slammed by US President Donald Trump. 

Harley, which commands about half of the US big-bike market, said it shipped 72,593 motorbikes in the quarter globally, down 11.3% from a year earlier.

It maintained its full-year shipments forecast range of between 231,000 and 236,000 bikes.

The company expects its motorbikes segment operating margin as a percent of revenue to be about 9-10% given the expected impact of tariffs in 2018. 

Operating margin in the second quarter for the motorbikes and related products segment was already down to 16% from 20% a year ago.

Harley, which is scrambling to steer through the slump in US demand and looking to boost sales of its motorcycles overseas, said its international retail sales - by dealers to customers - inched up 0.7% overseas. 

The company said its net income fell to $248.3m, or $1.45 per share in the second quarter ended July 1, from $258.9m, or $1.48 per share, a year earlier.

Revenue from motorcycles and related products fell 3.3% to $1.53 billion. 

Analysts on an average expected profit of $1.34 per share and revenue of $1.41 billion, according to Thomson Reuters.