Finance news

Harley-Davidson Inc. said Friday its fourth-quarter profit tumbled 26.3 percent due to slumping U.S. motorcycle sales amid a weakening economy.

CEO Jim Ziemer called the retail environment "challenging" for this year. The Milwaukee-based company expects moderate growth in both earnings per share and revenue, however. Analysts expected slightly lower revenue and higher earnings in 2008.

Harley’s (HOG, Fortune 500) shares gained 2.9 percent in morning trading Friday.

Harley said its profit for the quarter ended Dec. 31 totaled $186.1 million, or 78 cents per share, compared with a profit of $252.4 million, or 97 cents per share, a year ago. Revenue dropped 7.7 percent to $1.39 billion from $1.50 billion in the period.

Analysts had expected a profit of 82 cents per share on revenue of $1.34 billion, according to a poll by Thomson Financial. The earnings estimates typically exclude one-time items.

Worldwide retail sales of Harley-Davidson motorcycles were down 6.1 percent in the quarter, and 14.2 percent in the U.S. The company said the domestic heavyweight motorcycle market was down 9 percent in the quarter. Overseas, Harley’s sales were up 17.4 percent.

Harley’s shipments were down 12.5 percent to 81,206 units, a drop of 11,642 units.

For the year, profit fell to $933.8 million, or $3.74 a share, from $1.04 billion, or $3.93 a share, in 2006 absolutely free credit report. Revenue slipped 1.3 percent to $5.73 billion from $5.8 billion in 2006.

Worldwide sales fell 1.8 percent in 2007, while U.S. sales were down 6.2 percent. The overall heavyweight market was down 5 percent for the year, Harley said. Internationally, Harley’s sales finished the year up 13.7 percent.

Shipments for the year were down 5.3 percent to 330,619 motorcycle units, from 349,196 bikes in 2006. Harley-Davidson cut its bike shipments in the wake of expected falling sales and even idled its plants for a week in November.

First quarter shipments are expected to be between 68,000 and 72,000 bikes, compared to 67,761 units in the first quarter of 2007.

Ziemer said Harley will monitor its wholesale shipments throughout the year.

For the year, Harley-Davidson said it expects moderate revenue growth and earnings per share growth of between 4 and 7 percent compared to 2007.

But analysts are expecting a drop in revenue to $5.6 billion for 2008 and earnings per share of $3.79, according to a poll by Thomson Financial.

The company bought back 20.4 million shares of its stock in 2007 at a cost of $1.15 billion. 

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France stepped up efforts to restore confidence in the banking system as Societe Generale faced tough questions on Friday over why it failed to prevent the biggest financial dealing scandal in history.

Commenting for the first time, while on a trip to India, on the bank’s $7 billion in rogue trading losses, President Nicolas Sarkozy called it a “large scale internal fraud” said it did not call into question the solidity of France’s financial system.

Echoing reassurances from both government and central bank when the scandal broke on Thursday, Sarkozy said the losses “do not affect the solidity and reliability of the French system”.

Bank of France Governor Christian Noyer said in a radio interview Societe Generale’s accounts were now clean after the bank moved to unwind positions built up by a lone trader under the noses of his supervisors.

Noyer dismissed speculation that some of the losses pinned on the trader were due to the ongoing global credit crisis, but hinted other French banks could announce writedowns linked to credit market losses when they report earnings.

“We know exactly what the exposures are http://pay-day-home.com. The provisions have been announced or will be announced in the coming days, where necessary,” Noyer told RTL radio.

In full page adverts in France’s leading newspapers, Chairman Daniel Bouton apologized to SocGen shareholders as newspapers and analysts questioned whether a stay of execution granted him by the bank’s board would last long.

Bouton offered to quit but was asked to stay on. 

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Baltimore–Baltimore Mayor Sheila Dixon’s administration will file suit today in U.S. District Court alleging California-based Wells Fargo Bank has engaged in predatory lending practices in black neighborhoods, The Baltimore Sun reported Tuesday.

The potentially groundbreaking lawsuit, which the Sun says could be the first in which a city tries to recoup foreclosed home costs, revolves around allegations that the lender practiced reverse redlining, selling high-interest subprime mortgages to black Baltimore citizens more often than to white residents. Reverse redlining is a violation of federal housing law.

Since 2004, Wells Fargo has been one of Baltimore’s two largest mortgage providers. The bank made 1,285 loans a year–cumulatively worth more than $600 million–from 2004 to 2006.

More than 33,000 Baltimore homes have been foreclosed since 2000 payday advance lender. Five times as many foreclosure events, including default notices and foreclosure sales, occurred in Baltimore from the first to the second quarter of 2007.

Most of the Wells Fargo loans that ended in foreclosure were for properties in primarily black neighborhoods and 70 percent had fixed interest rates, which should have allowed the bank to forecast its borrowers would not be able to handle the payments, according to Baltimore city officials.

Wells Fargo said in a statement that its pricing is not affected by race.
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