UPDATE 2-Harley-Davidson profits up on finance unit rebound

* Posts Q2 EPS ex-items of 59 cents vs 41 cents estimate

* Finance unit swings back to profitability

* Worldwide sales continue to fall, though at slower rate

* Company warns conditions “remain challenging”
(Adds details on sales and shipments)

CHICAGO, July 20 (BestGrowthStock) – U.S. motorcycle maker
Harley-Davidson Inc (HOG.N: ) reported better-than-expected
quarterly results on Tuesday, lifted by a return to
profitability at its in-house finance arm.

The results came as worldwide retail sales of the company’s
bikes continued to weaken, led by an 8.4 percent drop in the
United States, Harley-Davidson’s largest market.

The Milwaukee-based company said it believes “conditions
will remain challenging this year for new motorcycle
purchases,” and reiterated its expectation that it will ship
201,000 to 212,000 motorcycles to dealers and distributors in
2010 — 5 percent to 10 percent fewer than in 2009.

Harley-Davidson said it earned a net profit of $71.2
million, or 30 cents a share, during the second quarter, up
from $19.8 million, or 8 cents a share, last year.

The company, which is in the middle of a massive
restructuring, reported a profit excluding items, of 59 cents a
share.

On that basis, analysts, on average, expected Harley to
post a profit of 41 cents a share.

Sales of its bikes and related products were little changed
at $1.14 billion during the quarter.

But revenue at its financial services arm, which helps more
than half of Harley’s customers pay for their motorcycles,
jumped 40 percent.

As a result, the unit, which reported an operating loss of
$90.5 million during the comparable quarter last year, posted a
$68.1 million profit this time around.

Stock Market Advice

(Reporting by James B. Kelleher, editing by Maureen Bavdek)

UPDATE 2-Harley-Davidson profits up on finance unit rebound