Motorcycle maker Harley-Davidson achieved record revenue and earnings for its first quarter ended March 31, 2002. Revenue for the quarter was $US927.8 million compared with $776.9 million in the year-ago quarter, a 19.4 percent increase. First quarter diluted earnings per share (EPS) were 39 cents, a 30.6 percent increase compared with last year’s 30 cents.


A growth rate of 20 percent in retail registrations during the first quarter has encouraged the company to raise its 2002 production target to 261,000 motorcycles, up from the previous goal of 258,000.


The Dyna motorcycle family is now being assembled exclusively in Kansas City, after transferring from York, Pennsylvania, following a new five-year labour agreement with the Kansas City unions.


Financial performance for the motorcycles segment benefited from five percent more scheduled workdays in the first quarter of 2002 compared to last year’s first quarter.


First quarter revenue from motorcycles was $747.7 million, an increase of 21.9 percent over the first quarter last year.  Shipments totalled 64,669 units, up 10,515 units or 19.4 percent over last year and approximately 2,100 units over the announced target.

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To support the new 2002 calendar year production target of 261,000 units, Harley-Davidson is increasing its second quarter production target to 65,000 units.


First quarter revenue from parts and accessories (P&A) totalled $131.1 million, a 20.4 percent increase over the year-ago quarter.  General merchandise, which consists of apparel and collectibles, had first quarter revenue of $42.3 million, up 7.9 percent over the same period last year.


For the long term, the Company expects P&A revenue to increase somewhat faster than the motorcycle unit growth rate while general merchandise will grow slightly slower than motorcycles.


First quarter gross margin for the motorcycles segment was 34.0 percent of revenue compared to 32.7 percent in the first quarter of last year. Gross margin improvements were driven by the effect of the greater number of workdays as well as a stronger product mix and a greater percentage of domestic shipments.


Operating margin followed gross margin and was 18.7 percent of revenue, compared to 17.4 percent of revenue for the same period last year.


Harley-Davidson Financial Services reported first quarter income of $41.7 million, up from $32.9 million in the year-ago quarter. HDFS operating income was $12.2 million, compared with $5.0 million last year. The increase was due in part to continued strong acceptance of its consumer financing programmes as well as growth across all product lines.


Also contributing to the income growth was the January completion of the remaining $93 million sale of receivables from HDFS’ fourth quarter 2001 asset-backed securitisation offering. The Company expects HDFS operating income to grow at a rate approaching 25 percent for 2002.


Retail sales of Harley-Davidson motorcycles in the United States were up 21.2 percent for the period January through March 2002, compared to the same period last year. Retail sales in Europe and Japan were up 16.6 and 3.7 percent, respectively.