Harley-Davidson reported slumping sales for the third quarter Tuesday though it more than tripled profits thanks to its financial services division and efforts to slim down in a bad economy.
The Milwaukee company also said it's likely that full-year motorcycle shipments will decline 5 percent to 7 percent from last year. The company's shares fell nearly 7 percent.
Net income was $88.8 million, or 38 cents per share, for the three months that ended Sept. 26. That compares with income of $26.5 million, or 11 cents per share, in the same period last year.
Still, the company continues to wrestle with an economy that has sapped the will of its biggest customers to plunk down thousands for a high-end motorcycle.
The company reported a 7.7 percent decrease in retail motorcycle sales worldwide, including a 9.4 percent drop in the U.S.
Offsetting some gloomy sales numbers was the Harley-Davidson Financial Services unit, which recorded third-quarter operating income of $50.9 million, compared with a $31.5 million loss in the year-ago quarter.
"The economy has yet to turn around in a convincing way and many customers remain on the sidelines," CEO Keith Wandell said.
Harley has worked quickly to adjust to a new economy that has realigned the spending habits of thousands of potential customers.
Wandell emphasized how aggressively that Harley has restructured itself and cut costs, including hard-fought labor agreements with unionized employees.
In September, Harley won steep concessions from the its workers and agreed to keep open its two Wisconsin factories, saving about 1,350 jobs. The motorcycle maker had warned that it would move the production to another state if the concessions were rejected.
"It is clear to me that we are making solid progress against our goal, which is to transform our business at all levels so that we can succeed not only at today's volumes, but more importantly, grow and restore greater profitability over the long term," Wandell said.
Wandell is pushing for more nimble factories that can better align production and demand, while getting motorcycles quickly to customers that are still buying.
Restructuring already is starting to deliver results, Chief Financial Officer John Olin said. "I can't tell you definitely when retail growth will return, but I can assure you that we are managing the business prudently," he said.
Harley reported a net profit of 40 cents per share from continuing operations. Revenue fell 2 percent to $1.09 billion.
Analysts surveyed by Thomson Reuters expected 35 cents per share on $1.1 billion in revenue.
The company narrowed its full-year guidance on shipments, raising the low end of its predicted range. Harley now expects to ship 207,000 to 212,000 motorcycles this year. Previous guidance was 201,000 to 212,000.
For the first nine months of the year, Harley reported net income of $193.3 million, or 82 cents per share. That's up from $163.6 million, or 70 cents per share, in the prior year.
Shares of Harley-Davidson Inc. fell $2.19, or 6.8 percent, to close Tuesday $30.30.