FOOL PLATE SPECIAL
Harley-Davidson "Hogs" the Market

It's business as usual for America's favorite hog maker -- and I'm not talking Jimmy Dean. Harley-Davidson reported yet another record-breaking quarter, topping projections and finding the company upping production targets. With new models and its 100th anniversary on the road ahead, it looks like more clear streets for Wall Street's easy rider.

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By Rick Aristotle Munarriz (TMF Edible)
October 10, 2001

These are trying times, indeed, but at least one icon of Americana is thriving right now: Harley-Davidson (NYSE: HDI) bucked the trend of slowing demand for big-ticket items by producing record third-quarter results. Earnings surged by 34% to $111 million, or $0.36 a share. The motorcycle maker's showing was good enough to inch the company past estimates -- in this case, projections calling for profits of $0.33 a share.

The top line couldn't keep up with the blazing speed of Harley's bottom line, though, as sales were up 19% to $850 million. That's fine: Wider margins are open highways to overachievers. 

It's been nearly 100 years since William Harley and Arthur Davidson got together to design the motorized bicycle. Through two World Wars and two Initial Public Offerings, the company has been an enduring growth player. It is clearly popular amongst Fools. Our Harley discussion board alone has generated nearly 15,000 posts over the years.

One good reason why? Stability. Even if owning a Harley carries an aura of danger and excitement, the same hasn't been true of the stock. Check out the company's bottom-line growth consistency:

Year       EPS
---------------

1991      $0.13 
1992      $0.18 
1993      $0.25 
1994      $0.31 
1995      $0.37 
1996      $0.47 
1997      $0.57 
1998      $0.69 
1999      $0.86 
2000      $1.13 
CAGR*     37.2%
2001E**   $1.38 
2002E     $1.60
 

*CAGR = combined annual growth rate
**E = estimated

Harley is always moving forward. While the bigger carmakers have their wild cyclical swings, Harley keeps a healthy wish list to assure that its production work quickly winds up on the open road.

Being an American symbol hasn't stopped it from making an impact overseas either. While sales have dipped in Europe so far this year on the heels of a strong greenback, sales are up smartly in Japan. Next year will also bring out the 100th anniversary models. If you thought demand was revved up now, you ain't seen nothing yet.  

Rick Aristotle Munarriz has never owned a Harley, though he has ridden one. Yes, he wore a helmet. Rick's stock holdings can be viewed online, as can the Fool's disclosure policy.