Harley-Davidson Reports Record Third-Quarter Earnings

Continued growth for America's largest motorcycle manufacturer demonstrates continued demand for motorcycles and health of motorcycle business.

The third quarter of 2003 was an important measure of Harley-Davidson Motor Company's ability to continue to its remarkable growth following its 100th-anniversary year. It is also regarded as a measure of the overall demand for motorcycles and the health of the American motorcycle business.

Harley's first 2003 anniversary models hit dealers amidst heavy demand for them during the third quarter of 2002, and to surpass sales for that period a year later would be a clear indicator of continued strong demand for the company's products. Harley demonstrated that strength when it reported a record third quarter in 2003, with a 14 percent increase in revenues, a 27 percent increase in motorcycles sold, and lower dealer inventories. If it continues to grow in the final quarter of 2003, which is really its first full quarter after its anniversary model year, any questions about strength and demand for its products will have been answered.

Harley-Davidson is increasing its production capacity and for the first time has target of over 300,000 units, announcing a 317,000-unit target for 2004, versus 291,000 for this year.

The third-quarter revenue increase from motorcycles sales was just 1.4 percent, however, reflecting both a slight reduction in prices on 2004 models and, we suspect, the arrival of and heavy demand for the new Sportsters, the company's lowest-priced series. Parts and Accessories showed a 4.3 percent increase, but the General Merchandise portion of its business, which includes collectibles and apparel, was off 27 percent ($60 million). This was to be expected since there was heavy demand for 100th-anniversary items at the beginning of its 2003 model year. Harley says that with the 100th-anniversary products eliminated, it saw growth in these categories.

The company reported a huge gain -- 56 percent -- in its financial services division.

The full press release is available on Harley's site through this link:

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