Harley, Winnebago highlight recovery's limits

* Harley misses, Winnebago reports wider loss

* Credit still tight though demand declines moderating

* Harley shares up 1.2 pct, Winnebago shares up 8 pct

By James B. Kelleher

CHICAGO, Oct 15 (Reuters) - Harley-Davidson Inc (HOG.N) and Winnebago Industries Inc (WGO.N) -- two closely watched U.S. vehicle manufacturers -- reported results that highlight the weak consumer spending that is limiting the economic recovery.

Both companies said sales were deteriorating at a slower rate, raising hopes that demand could return, sending their shares higher on Wall Street.

But they also acknowledged the uncertainty surrounding the market. Harley said the current sales environment "remains challenging" and Winnebago warned that "credit availability remains difficult on both the wholesale and retail level."

Harley's third-quarter profit tumbled 84 percent to $26.5 million, or 11 cents a share, from $166.5 million, or 71 cents, a year earlier, as the slow climb out of the recession weighed on sales of its bikes, which range in price from about $7,000 to over $30,000. [nN15291490]

A major culprit was the company's finance unit, where higher provisions for credit losses resulted in a $31.5 million operating loss. Harley expects those credit issues to extend well into 2010.

Winnebago, meanwhile, reported a wider quarterly loss as tight credit and the housing slump hampered consumer demand for its motor homes, some of which have price tags well above $100,000. [nN1093936]

The company reported a fiscal fourth-quarter loss of $50.2 million, or $1.73 a share, compared with a loss of $12.7 million, or 44 cents a share, a year before. Sales fell 30 percent to $59.5 million. The net loss for the quarter included a non-cash tax-related charge of $41.1 million, or $1.41 a share.

The news from the recreational vehicle industry was not all bad. Polaris Industries Inc (PII.N), a maker of all-terrain vehicles, snowmobiles and motorcycles, reported stronger-than-expected quarterly profit and raised its outlook as its popular Ranger side-by-side product continues to help it gain ATV market share.[nN15287169]

(Reporting by James B. Kelleher; Editing by Derek Caney)

((james.kelleher@thomsonreuters.com ; +1 312 408 8130; Reuters Messaging: james.kelleher.reuters.com@reuters.net )) Keywords: HARLEY WINNEBAGO/

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