Profit slides 84% at Harley-Davidson

With motorcycle sales still sluggish, Harley-Davidson Inc. said it is leaving the sport-bike market in a strategy to focus on its core lineup of heavyweight bikes.

The decision to discontinue its Buell motorcycle line and sell its recently acquired MV Agusta brand, while sudden, are the latest in a series of restructuring moves at Harley, which has been hit hard by the recession. Since early this year, the company has been cutting production and jobs and recently said it may relocate of its main motorcycle factory in Pennsylvania to save money.

The Milwaukee-based company, which reported an 84 percent slide in third-quarter profit, will sell off its remaining Buell stock, including motorcycles, accessories, and apparel, through its dealerships. Dealers will continue to offer replacement parts, warranties, and service for Buell bikes. The line’s closing will likely result in a $125 million one-time cost, with about $115 million of that amount this year.

About 100 salaried workers and about 80 hourly positions will be eliminated from winding down Buell, with most of the cuts by Dec. 18.

Harley-Davidson earned $26.5 million, or 11 cents per share, for the period ended Sept. 27, down from $166.5 million, or 71 cents per share, a year earlier.

Third-quarter sales dropped 21 percent to $1.12 billion, but its retail motorcycle sales decline of 21.3 percent was not as steep as the previous quarter’s decline.

Analysts surveyed by Thomson Reuters, whose estimates typically exclude one-time items, forecast profit of 21 cents per share on revenue of $1.1 billion.

Google Inc. shifted into a higher gear in the third quarter and began to leave the recession behind as the 11-year-old Internet search leader recorded its highest profit ever.

The results are the strongest indication yet that the Internet advertising market is bouncing back from its worst funk since the dot-come bust at the start of the decade.

Google is considered a good barometer for the state of Internet commerce because its search engine serves as the hub of the Web’s largest adverting network.

“The worst of the recession is clearly behind us and because of what we have seen, we now have the confidence to be optimistic about our future,’’ Eric Schmidt, Google’s chief executive, said.

Schmidt’s optimism echoed his public remarks leading up to the earnings release. That sentiment has helped propel Google to a succession of new 52-week highs this week, a rally that continued after the company put out its third-quarter number.

The Mountain View, Calif.-based company said it earned $1.64 billion, or $5.13 per share, in the three months ended in September. That represented a 27 percent increase from $1.29 billion, or $4.06 per share, at the same time last year.

Excluding expenses for employee stock compensation, Google said it would have made $5.89 per share - above the average estimate of $5.42 among analysts polled by Thomson Reuters.

Revenue for the three months ending in September climbed 7 percent to $5.94 billion. That’s Google’s fastest growth rate so far this year. After subtracting commissions paid to Google’s advertising partners, the company’s revenue totaled $4.38 billion - about $140 million above analyst estimates.

Associated Press

Cubist Pharmaceuticals Inc. said its third-quarter profit rose slightly, as higher income taxes offset a boost in Cubicin sales.

The Lexington, Mass., company earned $25.4 million, or 42 cents per share, up slightly from profit of $25 million, or 44 cents per share, during the same period a year prior.

Revenue rose 28 percent to $143.5 million from $112.4 million.

Cubicin, an antibiotic-resistant infection drug, is the company’s only marketed product.

Analysts surveyed by Thomson Reuters expected profit of 33 cents per share and $142.1 million in revenue.

During the quarter, the company had a $15.9 million provision for income taxes, which cut into profit.

IBM Corp.’s third-quarter results show that corporations are still reluctant to spend on some kinds of technology. IBM’s sales fell 7 percent, and all its major divisions suffered declines.

But IBM keeps making more money - net income was up 14 percent - largely because it has been focusing on outsourcing and other services that save clients money and are more profitable than selling hardware.

In the third quarter, net income was $3.2 billion, or $2.40 per share, ahead of analysts’ expectation for $2.38 per share. In the same period last year, IBM’s profit was $2.8 billion, or $2.04 per share.

Sales were $23.6 billion, slightly better than the $23.4 billion expected by analysts polled by Thomson Reuters.

Associated Press