On Jan. 25, motorcycle maven Harley-Davidson (NYSE: HOG) released earnings for the 2007 fiscal year -- a period ended Dec. 31, 2007.

  • Harley burned a lot of cash over the last year while unsold inventory piled up in its warehouses. The fickle aspirational consumer strikes again.
  • Double-digit sales growth abroad wasn't enough to erase a weak American market. The domestic market is vital to these biker boys; nearly 80% of Harley's sales happen at home, year after year.
  • Management is fighting to keep shareholders happy with a glad-handed buyback plan, but with the cash reserve running low, it's becoming an uphill battle. And borrowing money on a corporate scale ain't as easy as it used to be, thanks to the ongoing credit crunch in Wall Street's banking district.

(Figures in millions, except per-share data.)

Income Statement Highlights

FY 2007

FY 2006

Change

Sales

$5,727

$5,801

(1.3%)

Net Profit

$934

$1,043

(10.5%)

EPS

$3.74

$3.93

(4.8%)

Diluted Shares

249.9

265.3

(5.8%)

Get back to basics with the income statement.

Margin Checkup

FY 2007

FY 2006

Change*

Gross Margin

36.9%

38.5%

(1.6)

Operating Margin

24.9%

27.5%

(2.6)

Net Margin

16.3%

18.0%

(1.7)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

FY 2007

FY 2006

Change

Cash + ST Invest.

$405

$897

(54.8%)

Accounts Rec.

$181

$143

26.7%

Inventory

$350

$288

21.5%

Liabilities

FY 2007

FY 2006

Change

Accts Payable & Accrued Liabilities

$785

$763

2.9%

Long-Term Debt

$0

$0

N/A

The balance sheet reflects the company's health.

Cash Flow Highlights

FY 2007

FY 2006

Change

Cash From Ops.

$798

$762

4.8%

Capital Expenditures

$242

$220

10.3%

Free Cash Flow

$556

$542

2.6%

Free cash flow is a Fool's best friend.

Competitive Context

Market Cap

Trailing P/E Ratio

CAPS Rating (out of 5)

Honda Motor (NYSE: HMC)

$55,579

8.6

****

BMW Group

$35,368

8.5

***

Harley-Davidson

$9,687

9.75

**

Yamaha Motor

$5,808

7.7

-

Polaris Industries (NYSE: PII)

$1,356

13.0

**

Using the latest reported numbers from Capital IQ. Keep your partners close and the competition in your vest pocket.

Related Foolishness:

BMW is a Motley Fool Stock Advisor recommendation, pink sheets and all. How in the world did that happen? Find out with a free 30-day trial riding pillion behind you. It's OK, you'll still look cool.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Anders Bylund had no position in any company mentioned, nor did he own a motorcycle. Or a chopper. Zed's dead, baby, and Fool rules are here.