Harley-Davidson Inc. (NYSE: HOG) reported a disappointing quarterly profit and announced on Tuesday that it would be cutting jobs to fund increase spending on product development and marketing. Profits are down due to weak global sales.
After reporting lower-than-expected earnings and cutting its 2015 operating profit guidance, Harley-Davidson’s shares dropped almost 10%.
The company will likely incur a one-time charge of up to $35 million during the fourth quarter for job cuts and reorganization costs.
After revising their 2015 operating profit guidance, the company expects a profit margin of 16% to 17% for its motorcycles segment. Previously, the company projected an 18% to 19% profit margin.
Harley-Davidson has also cut its forecast for motorcycle shipments in the US and sales dropped 2% during the third quarter, the company’s market share dropped 3.9%.
Global sales for the company dropped more than 1%, and its reorganization plans included 200 new dealership openings abroad.
Overall motorcycle sales have dropped nearly 47% over the last decade, according to the Motorcycle Industry Council. In 2004, sales were at 1,063,000, while in 2014, sales were at 560,000.
Harley-Davidson reported a net income of $140.3 million, which was lower than its net income of $150.1 million the previous year.
Earnings per share were $.69 , which was the same as last year. Analysts were looking for $.78 per share.