Harley-Davidson's profits boosted by financial services

Motorcycle maker Harley-Davidson has reported a rise in first-quarter profits but says it is cautious about prospects for the year.

Profits were $119m (£73m) for the first quarter of 2011, against $68m a year ago, helped by a big rise in profits generated by its financial services.

But Harley said it expected to ship fewer vehicles to dealers in 2011 than previously projected.

It added its supply chain had been affected by the earthquake in Japan.

In total, 49,597 new Harley-Davidson motorcycles were sold across the globe, up from 47,925 compared with last year's quarter, but the firm said profits from selling bikes and related products were flat.

But the US market saw a 0.5% fall in new sales, which chief executive Keith Wandell said "related to the challenging macroeconomic conditions".

The company said it had been affected by supply chain problems stemming from the earthquake and tsunami in Japan, and it would need to find another manufacturer to provide the microchip that helps run radio displays on its motorcycles.

"While we continue to be encouraged by our overall progress, we are maintaining a cautious outlook for the year," added Mr Wandall.

Shares in the company fell by about 4% on the New York Stock Exchange.