HDFS Originations Dip 4.4%, Losses Temper in 2Q

Harley-Davidson Financial Services originated $987 million in motorcycle loans — down 4.4 % year over year — in the second quarter, according to the OEM’s earnings call today.

Originations were also down 1.1% year-to-date to $1.7 billion, as compared to the prior-year period.

Net losses for the quarter reached 1.7%, compared with 1.5% in 2Q16. Additionally, delinquencies 30 days or more past due were up slightly on a year-over-year basis to 3.3%, from 3.2%.

While both losses and delinquencies are up, the rate of increase continues to “temper” from last last year, Harley-Davidson Inc.‘s Chief Financial Officer John Olin said on the call. HDFS continues to offer “robust liquidity” and it contributes “strong profitably” to parent Harley-Davidson, he added.

Also of note, financial services operating income was down 8.5% year over year to $81.9 million in 2Q, according to the earnings.

Separately, industry new motorcycle sales deterioration continues. Harley-Davidson’s U.S. new retail sales in 2Q were down 9.3% to 49,668 units — a drop that was “certainly bigger than expected,” Olin said. The decline was primarily driven by “weak industry conditions,” he added.

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