) to neutral from overweight.
Harley-Davidson posted 62 cents third quarter earnings per share. Analyst William Lerner says he and the Street had a 56 cents estimate. He notes as unit shipments and net revenues fell 1% and 3% short of expectations, Harley-Davidson exceeded numbers through improved gross margins, and notable securitization gains in the Harley-Davidson Financial Service unit.
Lerner thinks the shortfall in the motorcycle maker's unit shipments and heavy reliance on the financial services unit suggests there's some fundamental negatives for the business, but he says Harley-Davidson's 2004 unit shipment guidance of 8.9% is more concerning to him over the next 12 months. Lerner cut the $2.59 2004 earnings per share estimate to $2.56, and cut the $59 target to $55.