CHICAGO (Reuters) - Harley-Davidson Inc (HOG.N) will give investors on Tuesday a fresh look at the impact of trade conflicts and a strong dollar on its profits, and analysts are bracing for bad news and more cost-cutting.
FILE PHOTO: A U.S. flag is pictured in front of Harley-Davidson bikes at the "Hamburg Harley Days" in Hamburg, Germany, June 24, 2018. REUTERS/Fabian Bimmer/File Photo
Analysts polled by Reuters, on average, expect the Milwaukee, Wisconsin-based company to report a profit of $1.34 per share, below the $1.48 per share reported in the corresponding period a year ago.
The earnings report comes a few weeks after Harley announced a plan to move production of motorcycles for the European Union from the United States to its overseas facilities to avoid the tariffs imposed by the trading bloc in retaliation for Trump’s duties on steel and aluminum imports.
To offset falling demand at home, Harley has been aiming to boost overseas motorcycle sales to 50 percent of annual volume from about 43 percent. With revenues from EU countries second only to the United States, the region is a key part of its growth strategy.
However, the decision to shift production overseas sparked an angry reaction from President Donald Trump, who threatened to impose higher taxes on the company and warned of a public backlash if Harley went ahead with the plan. Trump, however, did not specify how he could target Harley-Davidson with higher taxes, and no action has been taken since he made the threat in late June.
Harley has assembly facilities in India and Brazil, and is expected to launch an assembly plant in Thailand in September.
The fallout from Washington’s restrictive trade policies has exacerbated the travails of a company that has been grappling with
