Harley-Davidson, Inc. (HOG) Q4 Earnings Preview: Riding A Familiar Road

Harley-Davidson, Inc. (NYSE:HOG) will release its fourth-quarter and full-year 2013 financial results before market hours on Thursday, January 30, 2013.  The public is invited to attend an audio webcast with Keith Wandell, Chairman, President and Chief Executive Officer and John Olin, Senior Vice President and Chief Financial Officer, Harley-Davidson, Inc. from 8:00 AM to 9:00 AM (Central Time).

Wall Street anticipates that the motorcycle maker will earn $0.34 per share for the quarter, which is $0.03 better than last year's $0.31 per share. iStock expects the HOG to beat Wall Street's consensus number. The iEstimate is $0.35; a penny above the street's outlook.

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Harley-Davidson is the parent company for the group of companies doing business as Harley-Davidson Motor Company (HDMC) and Harley-Davidson Financial Services (HDFS). The Company operates in the Motorcycles and Related Products (Motorcycles) segment and the Financial Services (Financial Services) segment.

HOG has ridden past Wall Street's consensus estimate 13 of the last 16 quarterly checkups with one bearish surprise and two on-target results. Harley-Davidson's actual earnings averaged $0.05 more than the consensus for the 13 upside surprises. The range of beats stretches from $0.01 (1.39% more than forecasted) to $0.17 (40.48% more). Meanwhile, the lone bearish surprise in the last 16 EPS reports was a miss of -$0.02.

Harley's earnings-driven stock performance is nearly as impressive as its bullish surprise history. Shares have rolled-on higher in the days circling 10 of the last 16 announcements. The stock travelled from 1.20% to 13.40% higher with and average gain of 6.17%. 

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On six occasions, HOG shares put it in reverse, falling from -0.20% to -8.50%, coincidentally both ends of the barbell were January reports.

Based on what we see on Google Trends for the keyword "Harley-Davidson," iStock would anticipate Q4 2013 looking awfully close to Q4 2012. Web queries are exactly the same year-over-year. 

The difference from year-to-year has to come from fatter margins, which we think is possible based on last quarter's financial statements. In Q3, management was able to lift margins to 18.72% from 17.36%. If the relationship stays the same for Thursday's announcement, it could add up to nickel to last year's EPS based on the consensus sales estimate of $1.04 billion. If results are similar to last year's $1.01 billion, then wider margins would add $0.03 to $0.04 to Q4 2012's total.

Overall: Improved margins could help Harley-Davidson, Inc. (NYSE:HOG) generated earnings from $0.34 to $0.36, which would top Wall Street's expectations, again. However, if revenue comes in flat year-over-year, as Google Trend hint, then investors could be mildly disappointed.