U.S. motorcycle maker Harley-Davidson profit topped Wall Street estimates on Tuesday for the sixth straight quarter, as sales of its bikes overseas edged up, although the company warned that new European Union tariffs would squeeze its operating margins.
International shipments rose 2.4 percent to 29,546 motorcycles in the quarter.
The results come nearly a month after the motorcycle maker, which has been at the center of the brewing trade war between the United States and the European Union, said it planned to shift production for European customers overseas to avoid EU tariffs, a move that was slammed by U.S. President Donald Trump.
Harley, which commands about half of the U.S. big-bike market, said it shipped 72,593 motorcycles in the quarter globally, down 11.3 percent from a year earlier, and maintained its full-year shipments forecast range of between 231,000 and 236,000 motorcycles.
The company expects its motorcycles segment operating margin as a percent of revenue to be about 9 to 10 percent given the expected impact of tariffs in 2018. Operating margin in the second quarter for the motorcycles and related products segment was already down to 16 percent from 20 percent a year ago.
Harley, which is scrambling to steer through the slump in U.S. demand and looking to boost sales of its motorcycles overseas, said its international retail sales — by dealers to customers — inched up 0.7 percent overseas.
The company said its net income fell to $248.3 million, or $1.45 per share in the second quarter ended July 1, from $258.9 million, or $1.48 per share, a year earlier.
Revenue from motorcycles and related products fell 3.3 percent 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 I/B/E/S.