Harley Davidson (HOG), despite Buffet riding to the (ahem) rescue (with onerous terms) [Feb 3: Buffet Provides Financing to Harley Davidson] is slashing its dividend... this lending arm is going to be bad news for Harley.- Harley-Davidson Inc. slashed its dividend by more than two-thirds Thursday as the company seeks to preserve cash and weather the sluggish motorcycle market. Harley said its board of directors approved a cash dividend of 10 cents per share for the first quarter. The dividend is payable March 19 to holders of common stock on March 5. The Milwaukee-based company said the lower dividend will preserve about $50 million in cash during the quarter.
- Shortly after the dividend cut, Fitch Ratings downgraded several of its ratings on Harley and on Harley-Davidson Financial Services, its lending arm, citing financial uncertainty at HDFS.
- The new ratings, which affect $782 million in debt held by Harley-Davidson and $3.2 million in debt held by HDFS, reflect higher borrowing costs, deteriorating asset quality performance and weaker operating performance at HDFS, Fitch said. HDFS has been troubled lately due to its difficulty unloading debt in the asset-backed securities market.
[Jan 25, 2008: I Can't Believe this Pig...err HOG was up Today]
[Sep 7, 2007: More Retail Tells? Harley Davidson and Office Depot]
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1 comments:
HOG dropped with the market the last two days and didn't recover much in the last hour recovery. DOW Chemical also cut its dividend. Not only did it drop with the market, but it dropped more while the market recovered. Cutting dividends is bad news.
jegan
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