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Harley-Davidson reports mixed fourth-quarter earnings

Harley-Davidson reports mixed fourth-quarter earnings
The 2016 Harley-Davidson CVO Pro Street Breakout. (Harley-Davidson Motor Company)

A day after unveiling two appealing new motorcycles to its 2016 line-up, Harley-Davidson reported mixed fourth-quarter earnings that temporarily boosted the company's wobbly stock performance.

The Milwaukee-based motorcycle company said earnings per share were 22 cents, above analysts' expectations. But revenue of $1.01 billion was below predictions of $1.02 billion.

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Shares rose 8% in early morning trading.

The last quarter of 2015 showed marked drops from the same period a year ago. Revenue was down 1.6%, earnings per share were off 37% and net income was off 43%.

Year over year, revenue was down 3.7%, earnings per share 4.9%, and net income 10.9%.

Analysts were encouraged, however, by the company's promises to increase marketing expenditures by 65% — in an effort to battle rising competition from Indian, Victory and lower-priced Japanese motorcycle makers, and to expand the company's aging, shrinking customer base — and to increase its investment in product development by 35%.

"Relative to last year, it's pretty negative, but it's a relief that it wasn't any worse," said Edward Jones analyst Robin Diedrich.

Though the company faces short-term challenges, particularly because of dollar-vs.-yen fluctuations that allow the Japanese companies to be more aggressive on pricing, Diedrich said, she's encouraged by Harley-Davidson's overall game plan.

"The long-term strategy has worked very well," Diedrich said. "They have managed their brand and product very well."

Harley stock, which trades as HOG, has taken a year-long beating, falling from $70 a share in December 2014 to its current level of $37.

Twitter: @misterfleming

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