I guess you could say that shareholders of Harley-Davidson (HOG) aren't in hog heaven. The motorcycle magnate announced solid third-quarter earnings results, but it disappointed the Street with its motorcycle sales.

Let's start with the good news. Harley-Davidson reported third-quarter net income of 38 cents per share ($88.8 million) or 40 cents per continuing share, far better than last year's same-quarter earnings of 11 cents per share. What's more, these results topped the consensus estimate of 35 cents per share. The company was even able to overcome poor quarterly sales because of it financial services division and cost-cutting efforts.

Harley-Davidson (NYSE:HOG) announced its third quarter earnings this morning, and they reflected the slack in demand the company warned us about last month. For the quarter, net income fell to $265 million from $312.7 million in the same quarter of 2006, and diluted EPS was $1.07, compared to $1.20 in 2006. Analysts surveyed by Thomson Financial had expected earnings of $1.05

U.S. sales fell by 2.5%, but international sales, up 8.8%, helped keep the drop in overall world sales to only 0.2%. For the year, the company now expects to ship 332,000 bikes, down 4% from 2006. EPS is also expected to finish 4-6% behind 2006 totals of $3.93, quite a swing from the 4-% growth the company projected in its 2nd quarter report.

Harley-Davidson Financial Services revenue fell, as might be expected, in step with the decline in sales, lagging 10.4% from a year earlier.

One bright note in the report is that, while the company's sales for the first nine months of 2007 were off 4.7%, the overall sales of heavyweight motorcycles, the class in which most of H-D's bike fall, was off 4.4%. This suggests that the company is not losing market share to its competition.

For more perspective, read Sheldon Liber's take on H-D.