# Harley-Davidson profit drops on rising costs and chip shortages Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-04-27 Category: INVESTING Category URL: https://financedigest.com/category/investing Meta Title: Harley-Davidson Inc First-Quarter Profit Drop Meta Description: Harley-Davidson's profit decreases due to higher costs and chip shortages, but sales rise thanks to global price increases. Learn more here. URL: https://financedigest.com/harley-davidson-profit-drops-on-rising-costs-and-chip-shortageshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-04-27t112131z2lynxnpei3q0hortroptp4ukraine-crisis-companies-1736815811417-compressed.jpg) By Bianca Flowers (Reuters) -Harley-Davidson Inc reported a drop in first-quarter profit, in line with Wall Street expectations, as margins at the motorcycle maker were squeezed by higher costs and chip shortages, while sales were boosted by global price increases. The Milwaukee-based company’s shares were down 1.2% in midmorning trading at $36.20 on the New York Stock Exchange. The 119-year-old manufacturer, which has been facing surging [costs for raw materials and logistics, said it now expects higher input costs to continue through the rest of the fiscal year](https://www.financedigest.com/commonenergy-mistakes-costing-homeowners-hundreds-of-pounds-each-year.html "Commonenergy mistakes costing homeowners hundreds of pounds each year"). Even so, Harley said it is [seeing strong](https://www.financedigest.com/italys-mps-sees-safe-habour-ahead-after-strong-quarter.html "Italy’s MPS sees ‘safe habour’ ahead after strong quarter") consumer demand for its bikes. The global semiconductor shortage has not yet eased, which has added to margin pressures – [pushing the company to maintain its outlook for an already extended](https://www.financedigest.com/global-central-banks-extend-rate-hike-push-in-november.html "Global central banks extend rate hike push in November") backlog of orders for bikes. We are cautiously optimistic on improvements in the supply chain environment in the second [half of the year](https://www.financedigest.com/an-apple-a-year-half-of-iphone-users-will-upgrade-to-the-iphone-7.html "AN APPLE A YEAR: HALF OF IPHONE USERS WILL UPGRADE TO THE IPHONE 7"). However, this remains difficult to predict with certainty,” [Chief Executive officer](https://www.financedigest.com/host-analytics-appoints-chris-labruna-as-chief-revenue-officer.html "Host Analytics Appoints Chris LaBruna as Chief Revenue Officer") Jochen Zeitz told analysts on a conference call. [Sales from motorcycles and Harley’s related products division rose about 6% to $1.3 billion](https://www.financedigest.com/allianz-puts-n26-stake-up-for-sale-at-3-billion-valuation-ft.html "Allianz puts N26 stake up for sale at billion valuation – FT"), with the parts and accessories business seeing the strongest growth of 11%. [Supply chain](https://www.financedigest.com/in-the-supply-chain-clean-data-is-the-fuel-of-the-future.html "In the supply chain, clean data is the fuel of the future") snarls dented motorcycle sales in North America as production challenges resulted in lower dealer inventories, the company said. “On average, a bike is sitting on the showroom floor in the U.S. for less than two weeks, which is an extraordinary reduction from Q1 2019, when this (was) more like 10 weeks,” said [Chief Financial Officer](https://www.financedigest.com/deutsche-bank-names-eigendorf-new-chief-sustainability-officer.html "Deutsche Bank names Eigendorf new chief sustainability officer") Gina Goetter. Harley’s overall growth [outlook remains unchanged as the company expects](https://www.financedigest.com/commerzbank-keeps-outlook-as-lower-q3-profit-still-beats-expectations.html "Commerzbank keeps outlook as lower Q3 profit still beats expectations") revenue to continue its upward trajectory, which has been helped by a combination of pricing actions and surcharges for its cruisers and longer-range Grand American Touring bikes. Net [profit was $223 million](https://www.financedigest.com/hellofresh-sees-2023-core-profit-of-460-540-million-euros.html "HelloFresh sees 2023 core profit of 460-540 million euros"), or $1.45 per share, in the first quarter, compared with $259 million, or $1.68 per share, a year earlier. The company price surcharges in global markets have helped offset production costs and [boost sales](https://www.financedigest.com/mercedes-posts-rise-in-q1-sales-boosted-by-evs-premium-cars.html "Mercedes posts rise in Q1 sales boosted by EVs, premium cars"). Revenue rose 5% to about $1.50 billion. [Demand for bikes remains strong as motorcycles saw a slight uptick in revenue of $1.3 million from $1.2 million a year](https://www.financedigest.com/heathrow-airport-says-return-to-pre-pandemic-demand-years-away.html "Heathrow Airport says return to pre-pandemic demand years away") prior. (Reporting by Bianca Flowers in Chicago and Aishwarya Nair in Bengaluru; Editing by Arun Koyyur, Louise Heavens and Jonathan Oatis) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---