Markets

Harley-Davidson Sales: Is Harley Getting Its Vroom Back?

By Rachel Elson

Updated on: July 8, 2011 / 8:22 AM EDT / MoneyWatch

Is Harley-Davidson getting its vroom back?

The company's U.S. motorcycle sales should move into positive territory in the second quarter for the first time since 2006, an analyst predicted Wednesday.

Harley-Davidson (HOG) has been struggling since the recent recession, when it got hit by a triple whammy. The biggest problem was Harley's core fan base: the same baby boomers who took the biggest financial hit during the downturn. Meanwhile, the credit crisis made it harder for would-be customers to finance its high-priced motorcycles, which can run as much as $30,000.

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A broader downturn in luxury good purchases didn't help much either. As a luxury item, Harley has continued to lag the automobile market during the economic recovery.

After earning $654 million in profit in 2008 (and $933.84 million in 2007), Harley sales plunged; the company showed a $55 million loss in 2009 and laid off about 1,000 workers â€" roughly 12% of its workforce. Shares tumbled from about $61 in the middle of 2007 to a low of $8.33 as the market slid.

Now, however, the famed motorcycle giant may be catching a tailwind from ongoing manufacturing troubles stemming from the Japanese earthquake and tsunami earlier this year.

Harley's two largest competitors in heavyweight motorcycles, Honda and Yamaha, "continue to face severe supply chain disruptions," noted Wedbush analyst Rommel Dionisio in a report last week.

The company is set to release earnings and sales figures on July 16. William Blair analyst Sharon Zackfia said on Wednesday she expects management to raise the low end of its 2011 production guidance of 215,000 to 228,000 motorcycles.

In its most recent quarter, Harley said its first-quarter net income more than tripled, but sales slipped in the United States, its largest market.

Harley has also targeted overseas growth: In November it announced plans for an assembly plant in India -- its second overseas plant -- aiming at that country's booming motorcycle market.

The Associated Press contributed to this report.