Harley Dumps Buell and MV Agusta

[dt]

Milwaukee Sentinel:

Harley-Davidson Inc. said Thursday it will discontinue its Buell motorcycle brand and divest its recently acquired MV Agusta lineup as part of the company's long term business strategy.

Buell to be discontinued; MV to be sold...

http://www.jsonline.com/business/64352232.html

Holy smokes! 

[bagobones]

Yikes!  Will Erik now put ALL of his Buell bikes into a giant crusher and make them into one giant cube?

[mrbones]

Ha! That is big news. What's to become of MV Agusta though?

I always thought the problem with Buells is that don't say Harley Davidson on them.

[bagobones]

Mr. Buell doesn't look so good.

http://www.buell.com/en_us/

[bagobones]

SAN FRANCISCO (MarketWatch) -- Harley-Davidson Inc. shares shrugged off early declines Thursday after the motorcycle giant reported a steep drop in third-quarter profit and said it will cut its Buell and MV Agusta brands.

Harley /quotes/comstock/13*!hog/quotes/nls/hog (HOG 27.55, +1.29, +4.89%) stock followed the broader market back into the green by midmorning, up 3.7% at $27.22. The shares are up 60% since the beginning of the year.



The Milwaukee-based company posted a profit of $26.48 million, or 11 cents a share, an 84% retreat from $166.54 million, or 71 cents a share in the year-ago period.

The latest quarter included a one-time charge of $14.2 million related to Buell and a goodwill impairment charge of $18.9 million related to the divestiture of MV Agusta.

Excluding these charges, earnings would have come in at 21 cents a share, according to Wells Fargo Securities analyst Tim Conder.

Total revenue fell to $1.1 billion from $1.4 billion a year earlier as retail sales fell 21.3% worldwide and 24.3% in its home market.

Analysts polled by FactSet Research were looking for a profit, on average of 23 cents a share with revenue of $1.1 billion.

"While the environment remains challenging for us, we are mildly encouraged by the moderation in the decline of dealer retail Harley-Davidson motorcycle sales," CEO Keith Wandell said. "And moving forward, our strategy is designed to strengthen Harley-Davidson for long-term growth and deliver results through increased focus.

The company said that 180 jobs will be lost over time as it shuts down Buell. It said it will book one-time charges of $215 million to $245 million in 2009 and 2010, about $55 million ahead of its July projections.

Harley said it expects to ship 35,000 to 40,000 motorcycles in the fourth quarter and a total of 222,000 to 227,000 for the full year.

Wells Fargo's Conder, who upgraded the stock to outperform a day earlier, lauded the report and the direction Harley is headed.

"We would continue to aggressively build positions as we believe margins will be further enhanced (from what reported) given discontinuance of Buell & MV Agusta," he said in a note to clients following Harley's conference call.

Shawn Langlois is a reporter for MarketWatch in San Francisco.

[mrbones]

It sucks to see an American company go down. Not that this one thing led to the closing of Buell, but I always knew crushing your own bikes as a publicity stunt was a bad idea.

Beating all the Japanese bikes in competition is a huge achievement.

[dt]

Corporate America has an unfortunate history of over responding to poor earnings, especially after not meeting previously released guidance, which is apparently the case here. Profits slid 84% from the same quarter last year. The corporate analysts have an unfortunate history of responding positively to those over reactions, which I think is the case yesterday.

All the biz articles seem to address HD unveiling a new corporate strategy, but it appears the strategy is solely discontinuing Buell and divesting MV. I suspect that Buell is sufficiently branded at this point and we’ll see them back in production, someplace. It wouldn’t be the first time … Triumph came back to life.

[mrbones]

Indian is back too! Again!

[dt]

Indians are nice, but pricy.

$35,500 

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Visordown News: A GROUP OF American businessmen are looking to take over the Buell name and keep motorcycle production going, following Harley-Davidson's shock announcement last week that the company is to be axed.

http://www.visordown.com/motorcycle-news-industry/buell-linked-to-takeover-bid/8513.html

Another article on Harley's strategy of further leveraging the "Brand."

http://hellforleathermagazine.com/2009/10/harley-didnt-calculate-savings.html

"We asked a former Wall Street banker with significant experience financing large motorcycle companies, what he thought of Harley's strategy. "'Leveraging the brand' is utterly ridiculous. People have the brand tattooed on their fucking flesh, how much more leveraged are you gonna get?"

   note "former" WS Banker! 

[dt]

Someone subtitled these Nazi movie scenes into Erik Buell getting the bad news.

<a href="http://www.youtube.com/watch?v=-vheY6tI_zo" target="_blank">http://www.youtube.com/watch?v=-vheY6tI_zo</a>

If not for the reference to the XR and the bra compliments, it would suck. 

_____________________________________________________________________

[dt]

Article on Motorcycle USA today. Looks like Erik may be back in biz soon.

Buell Back in Business with 1190RS