Let by a weakening domestic market, Harley-Davidson Inc. (NYSE:HOG) reported a plunge in profits in the fourth quarter of 26.3 percent, citing concerns of their customers over the uncertain economy.
"The big thing is not lack of interest," CEO Jim Ziemer said in an interview. "People are waiting to see what happens with the economy before making big decisions."
Harley's profits for the quarter ending December 31 came to $186.1 million, or 78 cents a share, far below the $252.4 million or 97 cents a share enjoyed a year ago. Revenue fell by 7.7 percent to $1.39 billion, down from $1.50 billion the same time a year ago.
Global sales helped the company from an even larger disaster, as they grew by 17.4 percent for the quarter, while total sales were down by 6.1 percent. International markets now account for a quarter of the sales at Harley.
The company's profits fell from $1.04 billion in 2006 to $933.8 million in 2007, with revenue holding stronger, dropping by a slight 1.3 percent from $5.8 billion in 2006 to $5.73 billion in 2007.
Even with the challenges of the economy and consumer concerns, Ziemer gave guidance that he expects the company can grow revenue and earnings at a moderate level for 2008. Most analysts think that's too optimistic, and project a drop in revenue to $5.6 billion for 2008, and earnings down to $3.79 a share.
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