HDFS Originations Climb 8% Amid Record Income Growth

Harley-Davidson Financial Services posted record operating income and 8% origination growth year over year in the fourth quarter of 2018, parent company Harley-Davidson announced in an earnings call.

Fourth-quarter originations climbed to $535 million, compared with $495.1 million in the year-prior period. The growth was driven by an increase in motorcycle sales in the dealer network, Harley Davidson Senior Vice President and Chief Financial Officer John Olin said on the call. From a full-year perspective, originations increased 4.3% year over year, to $3.1 billion.

Additionally, HDFS saw record growth in annual earnings. HDFS finished the year with record operating income of $291.2 million, up 5.8% from 2017. The operating income is the highest it’s been since 2015’s $280.2 million. The captive also grew revenue 2.2% to $291.2 million, “despite the fact that new motorcycle sales in the states are down,” Olin added.

The OEM attributed the growth to its captive’s performance rather than decreased competition. “We don’t see a big change in the competitive set in lending,” Olin said. “What you’re seeing… is that HDFS is doing an absolutely fantastic job at delivering to our dealers, integrating into their business process, and being very high quality at what they do.”

Delinquencies 30 days or more declined 9 basis points to 4.12% in the fourth quarter.

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