Iconic motorcycle maker Harley-Davidson Inc. posted a profit of $105.7 million for the fourth quarter, boosted by improved consumer confidence that prompted more riders to buy its often-pricy bikes.
The profit contrasted with a loss in the same period a year ago. The company said it expects to ship more motorcycles this year, but remains concerned about the possible effects of Europe's economic woes.
Keith Wandell, the company's president and chief executive, credited the fourth-quarter sales jump to improved consumer confidence in the United States, along with key growth investments overseas.
"We will continue to keep a close watch on the marketplace and remain cautious in our expectations of retail given the degree of continued economic uncertainty including regions like the Euro zone," Wandell said in a conference call with analysts.
Tough economic times tend to hurt sales at companies like Harley, whose bikes can range from about $8,000 for a basic model to more than $30,000 for a large highly customized model.
After the global economy stalled in 2008 and Harley's sales plunged 23 percent the next year, it embarked on a massive plan to slash its costs and transform the way it manufactures its motorcycles.
The restructuring has helped turn things around despite tough economic conditions. Harley's sales of motorcycle and related products grew 13 percent in 2011 and the recent quarter marked its third-straight increase in U.S. sales.
Harley reported net income of 46 cents per share for the three months ended Dec. 31. That contrasts with a loss of $46.8 million, or 20 cents per share, a year ago.
The recent quarter's results included a $51 million boost related to tax issues stemming from the company's sale of Italian motorcycle maker MV Agusta in 2010.
Excluding that benefit, the Milwaukee-based company earned 24 cents per share, compared with an adjusted loss of 18 cents per share in the 2010 quarter.
The adjusted profit fell a penny short of Wall Street predictions. Analysts polled by FactSet expected adjusted earnings of 25 cents per share.
Motorcycle and related product revenue rose 12 percent to $1.03 billion, slightly higher than average analysts' predictions of $1.01 billion. Retail sales of new motorcycles grew 11 percent worldwide and included a 12 percent increase in the United States.
International sales rose 9.7 percent and included a 5.8 percent increase in Europe, where consumer confidence has been shaken by the current economic crisis.
Harley shipped 50,730 motorcycles to dealers and distributors during the quarter, compared with 44,481 in the same quarter last year. For the full year, shipments rose 11 percent to 233,117 bikes.
Revenue from parts and accessories increased 7.9 percent to $161.2 million, while revenue from general merchandise, such as clothes and accessories jumped 13 percent to $69.3 million.
Harley's financial services division also got a boost from improved credit conditions. New motorcycle loans jumped 14 percent to $349.5 million and represented about half of the company's retail sales.
Harley said it wants to reduce its inventories and bring its production closer to demand. As a result, it expects to ship between 240,000 and 245,000 motorcycles this year, representing an increase of just 3 percent to 5 percent over 2011.
For the first quarter, Harley said it expects to ship between 58,000 and 63,000 motorcycles.
For all of 2011, Harley reported net income of $599.1 million, or $2.33 per share, up from $146.5 million, or $1.11 per share, in 2010. Motorcycle and related product revenue increased to $4.66 billion from $4.18 billion.
Harley-Davidson shares rose 80 cents, or 1.9 percent, to $42.67 in midday trading Tuesday.