Harley-Davidson Inc. (NYSE: HOG) recently revised downward its 1Q 2007 and FY 2007 guidance due to a nearly month-long strike at its York, PA manufacturing plant. The strike was finally settled in late February but the damage has already been done. Instead of shipping 82,000-84,000 motorcycles as had been planned prior to the strike, Harley will ship 64,000-66,000 motorcycles, a loss in production of 18,000 units. That's a lot of disappointed HOG loyalists who will have to spend more time on the waiting list for a bike. Although Harley will increase production in coming months, its still predicts a shortfall of 14,000 units for FY 2007.

As a result of the loss in production, Harley management forecast only moderate growth, lower margins and 4-6% EPS. Harley predicts a return to double-digit EPS growth rate by 2008. Due to the recent labor troubles, the stock has taken a beating. Prior to the strike, the stock traded right around $75 per share. Harley-Davidson stock closed at $63.54, up $.24 on March, down almost 15% since the beginning of the year.

Boston Scientific (NYSE:BSX) issued a weaker than expected forecast for Q3 2006 revenue and earnings, based primarily on problems associated with its pacemakers and defibrillators. These were the products manufactured by Guidant Corporation which Boston Scientific acquired in April 2006 for $27.5 billion. At the time of acquisition, Boston Scientific knew of at least 500 cases against Guidant in the U.S. The suits have since been consolidated. The suits allege that Guidant's cardiac pacemakers and defibrillators are defective and have the possibility to cause harm or death to patients in whom they have been implanted. Boston Scientific has set aside $381 million for legal defense costs, but still does not have an accurate estimate of the cost to settle all the suits related to Guidant's defective products. Also, Boston Scientific's own product, a drug-coated cardiac stent used to open clogged arteries, has suffered a decline in sales as heart surgeons turn to alternative devices perceived to have a lower risk of causing blood clots.

Q3 sales had originally been estimated at $2.18 billion, but have been revised downwards to just under $2 billion. Q2 stent sales in the US were $429 million, but Q3 sales are forecast to drop to $375 million. Global stent sales for Q2 were $647 million, but Q3 global stent sales are forecast to be approximately $565 million.

Boston Scientific stock lost 9% on Friday, 22 September, closing at $14.85, down $1.51. Do not look for an improvement in Boston Scientific's stock performance until the suits are settled or a ballpark settlement estimate has been made public.