THE BUSINESSWEEK 50 RANKINGS + 25

60

Harley-Davidson

As hogmaker to the world, Harley-Davidson rides far ahead of all other bikemakers for its ever-loyal fans. Even as its customer base ages, riders still rush to snap up its constantly refreshed—and pricey—line of bikes. That’s why revenues rose 9% in 2006, to $6.2 billion, as net income climbed 8.7%, to just over $1 billion, capping decades of unbroken growth. But with sales expected to dip after a three-week strike by workers at its big York (Pa.) plant cut production 21% in the first quarter, the company faces some rough road. Its stock, which peaked at nearly $76 a share in the past year, is struggling to stay in the mid-60s. Analysts have scaled back their ratings. Long term, Harley is wrestling with how much to change its bikes to suit shifting tastes and skimpier budgets among younger riders. Over time, avoiding becoming “grandpa’s wheels” could prove Harley’s biggest challenge.

Overall Grade

A-

Market Data

HOG

Market Value
(2/28/2007)

$17.0 Billion

Profitability*

39.9%

A

Sales Growth Rate**

7.9%

C

12-Month Sales

$6.2 Billion

12-Month Net Income

$1.0 Billion

Total Return Past 12 Months

27.1%

Past 36 Months

28.1%

Economic SectorConsumer Discretionary
IndustryMotorcycle Manufacturers
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.

James L. Ziemer

James L. Ziemer, 57

CEO since 2005


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Data as of 2/28/07 provided by Standard & Poor's Compustat