Harley-Davidson Shares Fall Despite Big Q3 Beat as Finance Unit Reshapes Model

Core Insights - Harley-Davidson Inc. shares fell over 5% despite reporting third-quarter results that significantly exceeded expectations, driven by a transformation in its financial services division [1] Financial Performance - The company reported adjusted earnings of $3.10 per share, surpassing the consensus estimate of $1.58, while revenue increased by 17% year-over-year to $1.34 billion, exceeding estimates of $1.01 billion [2] - The strong performance was largely attributed to the completion of the Harley-Davidson Financial Services transaction with KKR and PIMCO, which transitioned the unit to a capital-light, lower-risk structure [2] Market Trends - Global motorcycle retail sales declined by 6% compared to the previous year, with North America down 5% and international markets down 9%, reflecting weaker consumer confidence and higher interest rates [3] - The motorcycle segment (HDMC) experienced a 23% revenue increase as global shipments rose by 33%, although the operating income margin for HDMC decreased to 5.0% from 6.3% a year ago [3] Future Outlook - Management indicated that the HDFS deal is expected to generate approximately $1.2 billion to $1.25 billion in discretionary cash by the end of the first quarter of 2026 [3]