President Donald Trump appeared to reverse course on Harley Davidson(HOG) on Tuesday, pledging to retaliate against "unfair" European Union tariffs that the company partially blamed for its nearly 27% drop in first-quarter profit.
Trump, who called for a boycott against the motorcycle company last year amid a spat over steel, said that the EU tariffs have forced Harley to move U.S. jobs overseas. "So unfair to U.S. We will Reciprocate!" he said in a tweet.
Harley announced plans last year to move production of its motorcycles destined for the EU to overseas facilities from the U.S. to avoid EU tariffs imposed in retaliation against Trump's duties on aluminum and steel imports. In response, Trump called for a boycott of the company and threatened higher taxes as retaliation.
The White House did not immediately respond to requests for comment on Tuesday. Harley said it hasn't moved jobs overseas due to tariffs, but moving production of EU motorcycles to their plant in Thailand, which came on late last year to support customers in the ASEAN region. No jobs were impacted here in the US as a result.
Harley said Tuesday that falling demand, higher costs from U.S. tariffs on raw materials and European taxes on imports of its motorcycles hurt its earnings.
Here's how the company did compared with what Wall Street expected:
- Adjusted earnings: 98 cents per share vs. 65 cents per share forecast in a survey of analysts by Refinitiv.
- Revenue: $1.19 billion vs. $1.19 billion forecast by Refinitiv.
Harley said first-quarter net income was $127.9 million on consolidated revenue of $1.38 billion, compared to $174.8 million on consolidated revenue of $1.54 billion in 2018, a decline of 26.8%.
Its revenue from motorcycles and related products fell 12.3% from a year earlier to $1.19 billion.
Excluding the impact of tariffs and restructuring costs, the company said its net income fell to $127.9 million, or 80 cents per share, in the first quarter ended March 31 from $174.76 million, or $1.03 per share, a year earlier.
Its shares tumbled by 1.6% after initially jumping by more than 2% in premarket trading.
Harley has struggled with a drop in sales in the U.S. amid fears that younger buyers are less interested in big motorcycles than previous generations. Last quarter, the company's shares tanked after it released earnings that missed analysts' expectations.
The company has been trying to get more people excited about riding motorcycles again. In November, it started to preview its LiveWire electric motorcycle in the U.S. and Europe in an attempt to attract more riders overall, including younger ones.
Harley also unveiled a 10-year plan in 2017 to attract 2 million new riders by 2027. In addition to investing in electric bikes, it has set up schools across the country to teach people how to ride.