Harley-Davidson Inc. expects a slow start to the year, and didn’t do so well last year either.
The motorcycle maker reported a huge bottom-line miss Tuesday morning, fell short of revenue projections and delivered a rough outlook for motorcycle sales, especially for the first quarter. Harley-Davidson
expects to ship 53,000 to 58,000 bikes this quarter, and 217,000 to 220,000 motorcycles for the entirety of 2019, both well lower than expectations. Based on those forecasts, the company “is not expecting its U.S. market woes to dissipate any time soon,” according to Bernstein analyst David Beckel.
Shares of the motorcycle maker fell more than 7% in morning trading, as the market tried to make sense of management’s commentary about its “More Roads” plan, which is meant to help the company attract new riders and better engage existing ones. Beckel was struck by Harley’s “oddly optimistic evaluation of its progress” with these efforts, given the downbeat results and disappointing shipment outlook.
See our full earnings preview for this week’s busy slate
Joining Harley in Tuesday morning’s earnings parade were three Dow Jones Industrial
components, which reported mixed results.
did the best of the bunch, posting revenue and earnings beats, though the company reduced its outlook for the full year, citing the impact from its recent acquisition of health-records company M*Modal.
•Verizon Communications Inc.
beat expectations on adjusted earnings but missed slightly on the top line. Verizon took a previously announced charge during the quarter related to its acquisitions of AOL and Yahoo assets. The company’s full-year capital-expenditure outlook of $17 billion to $18 billion “should be comforting to investors” who may have been worried about a “larger spike,” according to Citi analyst Michael Rollins.
also saw its results impacted by an asset-impairment charge, as the company swung to a loss. The drugmaker issued a below-consensus forecast, but Evercore ISI analyst Umer Raffat said that has more to do with accounting and foreign-exchange impacts than with the base business.
Pfizer was not alone in reporting results in the health sector, with Allergan PLC
and HCA Healthcare Inc.
among this morning’s reporters. Amgen Inc.
follows later in the day.
•Allergan reported a fourth-quarter loss and delivered a disappointing forecast for the full year. Investors should pay attention to management’s commentary around its CoolSculpt business, as the “softness” there is “more problematic” than the company’s weak outlook, in the view of Mizuho analyst Irina Koffler.
•Biogen exceeded expectations on the top and bottom lines, reporting a slight increase in revenue for its most profitable multiple-sclerosis drug, Tecfidera.
•HCA shares are up slightly in Tuesday morning trading after the company beat across the board and delivered an upbeat forecast.
Among the other names on Tuesday morning’s docket was Xerox Corp.
which topped earnings expectations and offered an encouraging forecast. Lockheed Martin Corp.
shares headed lower after the contractor delivered a mixed quarterly report. And Brinker International Inc.’s
stock is plunging, though the company beat on same-store sales.
In the afternoon, all eyes will be on Apple’s
fiscal first-quarter results, though some of the suspense is gone following the smartphone maker’s downbeat preannouncement earlier this month. With the December-quarter numbers less of a question, the key metric will be Apple’s March-quarter outlook, which will give investors a sense of whether management expects its China woes to continue in the immediate future.
Gone are the days of seeing iPhone unit sales—Apple announced on its last earnings call that it would stop disclosing this metric—but the company will start being a bit more transparent about the profitability of its services segment. Investors should pay close attention to the company’s general commentary around this part of the business, according to RBC Capital Markets analyst Amit Daryanani, who said that “the implied slowdown in services is something that merits closer scrutiny.”
In particular, management may provide more information that shows how the services business has been impacted by slower-than-expected iPhone sales, likely impacting AppleCare revenue, or a freeze on new game approvals in China, which is an App Store headwind that may be easing up in the current period. See our full Apple earnings preview for more on what to expect.
Don’t miss: Apple has its problems but the App Store isn’t one of them, says Bernstein
The other big name on the docket for Tuesday afternoon is Advanced Micro Devices Inc.
which will deliver its results in the wake of peer Nvidia Corp.’s
stark warning about its own holiday-quarter revenue. Of interest in AMD’s report will be information about how the company is coping with the end of the cryptocurrency boom and how China’s economic issues are affecting demand. Among the companies joining Apple and AMD this afternoon are chip-equipment maker KLA-Tencor Corp.
and eBay Inc.