UPDATE 2-Harley-Davidson profit falls as it revamps production
* Third-quarter EPS 59 cents beat estimates by 1 cent
* Sales of $1.25 billion beat estimates
* Harley holds 2012 production forecast steady
* CEO says U.S. economy still 'fragile'
* Shares up 6 pct
By Nick Zieminski
NEW YORK, Oct 23 (Reuters) - Harley-Davidson Inc reported lower quarterly earnings on Tuesday as it revamped production at its largest factory, but the motorcycle maker kept its full-year forecast for shipments unchanged.
Both sales and earnings beat expectations, as Harley made progress attracting a more diverse customer base to its iconic "hogs," or motorcycles. Harley said sales to women, African-American and Latino customers, as well as to younger buyers, now account for 30 percent of bikes sold and are growing twice as fast as its core market.
Shares rose 6 percent to $46.19.
Harley, many of whose motorcycles cost well above $10,000, has to attract buyers at a time when U.S. consumers are still cautious ahead of an election, an uncertain jobs outlook and unresolved debt problems in Europe, said Chief Executive Keith Wandell.
"The economy is still fragile," Wandell said. "There's a lot that creates uncertainty for a high-end, discretionary brand like ours."
Net earnings fell to $134.0 million, or 59 cents per share, from $183.6 million, or 78 cents per share, a year ago. The results beat analysts' estimates by 1 cent, according to Thomson Reuters I/B/E/S.
Consolidated revenue fell to $1.25 billion, also ahead of estimates. Earnings graphic:
Milwaukee-based Harley is introducing an enterprise resource planning production system at its York, Pennsylvania, facility to boost efficiency and allow Harley to better respond to fluctuating market demand. The plant will be ready for a seasonal ramp-up in production early next year.
Harley, which is trying to broaden the appeal of its high-end motorcycles beyond its core Baby Boomer enthusiasts to include more young customers and women, held its full-year forecast steady - calling for a 5 percent to 7 percent increase in the number of motorcycles it ships to dealers, with gross margins of 34.75 percent to 35.75 percent.
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