Motorcycle maker Harley-Davidson Inc. reported record quarterly earnings on Wednesday as more efficient operations and the weak dollar boosted its margins.
But analysts were cautious, noting that U.S. retail sales of the company’s motorcycles fell 9.8 percent in the quarter, compared with an industrywide decline of only 2.3 percent.
“That’s going to be a little bit of a concern among people,” said Tim Conder, an analyst with A.G. Edwards. “But we’re not hearing any cause for concern among the dealer network.”
Other analysts noted that Harley-Davidson set its 2005 production target at 339,000 motorcycles, at the bottom of its long-term target growth range of 7 percent to 9 percent.
Third-quarter net income rose more than 20 percent to $229 million, or 77 cents a share, from $190.1 million, or 62 cents a share, a year earlier.
Analysts’ earnings forecasts ranged from 73 cents to 78 cents a share and averaged 75 cents, according to Reuters Estimates.
Analysts said margins made the difference. Gross margins widened to 38.0 percent from 35.6 percent a year earlier, while operating margins widened to 23.6 percent from 21.3 percent.
Harley-Davidson credited the integration of its new plant in York, Pennsylvania, and other efficiencies, as well as the weak dollar.
Revenue increased almost 15 percent to $1.30 billion from $1.13 billion a year earlier.
Sales of Harley-Davidson-brand motorcycles totaled $996.6 million during the quarter, an increase of 18 percent. Buell motorcycle sales declined to $18.3 million from $20.5 million.
The company said U.S. retail sales of Harley-Davidson motorcycles declined from a year ago, when results were boosted by the company’s 10th anniversary celebration.
“We are enthusiastic about the reception of our recently introduced 2005 model year motorcycles, in particular the new Softail Deluxe, the Screamin’ Eagle custom vehicles, the Sportster 883 Low and the redesigned Softail Springer Classic,” Jeffrey Bleustein, Harley chairman and chief executive, said in a release.