(April 19, 2011) MILWAUKEE (PRNewswire) — Harley-Davidson generated increased earnings, and worldwide motorcycle sales grew for the first quarter of 2011.

The company reported first quarter income from continuing operations of $119.3 million, or 51 cents per share, compared to income from continuing operations of $68.7 million, or 29 cents per share in the year-ago period.

Worldwide retail sales of new Harley-Davidson motorcycles grew 3.5 percent in the first quarter, compared to last year's first quarter.

"We are pleased by the growth of our dealers' new motorcycle sales on a worldwide basis, led by strength in Europe, even as we continue to encounter some headwinds in the U.S. related to the challenging macro-economic conditions," said Harley-Davidson President and CEO Keith Wandell.

The company's improved first-quarter earnings performance was driven by operating income from financial services, which climbed 154.6 percent compared to the first quarter of 2010. Operating income from motorcycles and related products was flat with the year-ago quarter and was impacted by expected inefficiencies related to the restructuring and implementation of the new operating system underway at the Company's manufacturing operations.

"Our entire team remains focused on transforming our company to be leaner, more agile and more effective than ever at delivering great products and experiences to an increasingly global community of customers," said Wandell.

"Harley-Davidson's results for the quarter reflect the continued improvement at HDFS, as well as the near-term inefficiencies related to the transformation underway in manufacturing operations at York. We expect to continue to see an impact on our motorcycles segment financial performance in the coming quarters as we complete the transformation of our York operations. When this manufacturing transition is completed next year, we will have a best-in-class, flexible, lean operating structure that we expect will yield substantial ongoing savings.

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