Harley Davidson, the US motorcycle giant, was able to outperform the estimates of analysts in its second quarter, easing the fears of investors over a major hit to its profits after the trade tariffs of US President Donald Trump.
The share price of the company increased by 5.79 percent as the markets opened in the afternoon of Tuesday, following a financial release by the company for the three months ending June 2018. It confirmed hopes that the profits of Harley will hold up better than expected against the tariffs of Trump on bikes that are made in the European Union.
The company reported a net income during its second quarter amounting to $248.3m, dropping from $258.9m that was recorded in 2017. Earnings per share were $1.45 during the quarter, as compared to the $1.48 during the same period last year.
Despite the drop in year-on-year growth, the results still surpassed the estimates by more than 6 percent. According to data from Thomson Reuters, the analysts predicted only $1.34 per share.
At the end of last month, Harley said that it plans to relocate some of its US production overseas to avoid clashing with the trade war of President Trump, most likely by utilising its plants that are located in Australia, Thailand, India, and Brazil.
The motorcycle manufacturer has also been having a hard time with other profit-affecting difficulties recently, such as a price-competitive environment and an aging customer base.
The president and chief executive of Harley Davidson, Matt Levatich, stated that the results were in line with the expectations of the company. The firm has plans to provide an update next week on the new strategies to meet the firm’s 2027 objectives, which includes increasing its international business to 50 percent of the annual volume from its current level of 43 percent.
At the start of this month, Trump said that he is working to attract more foreign motorcycle firm to move their production into the US as a response to the decision of Harley Davidson to do the opposite.
In a tweet, Trump said: “Now that Harley-Davidson is moving part of its operation out of the U.S., my Administration is working with other Motor Cycle companies who want to move into the U.S. Harley customers are not happy with their move – sales are down 7% in 2017. The U.S. is where the Action is!”
Earlier today, President Trump said that “tariffs are great!” before a meeting with Jean-Claude Juncker, the President of the European Commission. It seems to be a reminder to the voters that the US is “the ‘piggy bank’ that’s being robbed” by other nations.