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.

The venerable Harley-Davidson (NYSE:HOG) sputtered through another dismal quarter as reported today. Even Warren Buffett's recent vote of confidence in the form of purchasing $300 million of HOG debt wasn't enough to pretty up a year/year decline in worldwide sales of 12%, and sales this quarter last year were well below the previous year. The company did ship 3.9% more bikes to dealers than in 2008, when dealers were sitting on large stocks of unsold units, but it anticipates shipping 10-13% fewer bikes overall in 2009 than 2008.

Domestic sales dropped 9.7%. Diluted earning reported were $.50, below analyst expectations and down from $.79 Q1 of 2008. Revenue for the quarter was $1.01 billion, down only $2.7 million from same quarter 2008. General merchandise, usually a steady cash-generator for the company, also fell by 10.5% from a year ago.

Michael Fowlkes blogged earlier about the dip in Harley-Davidson (NYSE:HOG) stock prices. Those who plan on holding this stock for the long run might want to look carefully at the product and its market demographic.

In the short run, the brand should play strongly to boomers retiring with a wad of discretionary income and a taste for moderate adventure. They have the cash to pay for the top-line models such as the Road King, along with the (very pricey) Regalia.

For the following generation, however, H/D offers a weak lineup. Younger, more sport-oriented riders find nothing in the Harley dealership to compete with the race-tested (and promoted) sport bikes from Honda, Yamaha, Kawasaki and Suzuki. The Buell brand they have attempted to grow in this market sector has found no traction and remains a non-player. And the Chinese are ready to enter the market and beat the brains out of anyone competing strictly on price.