shares slipped early Wednesday even as the iconic motorcycle maker reported record third-quarter earnings.

The Milwaukee-based company said net income rose about 20% to $229 million, or 77 cents a share, vs. $190.1 million, or 62 cents a share, a year ago. Revenue rose to $1.3 billion vs. $1.13 billion in the year-ago quarter. Analysts expected the company to earn 75 cents a share.

Motorcycle revenue rose 18% to $996.6 million. Unit sales in the U.S. rose to 66,859, from 54,829. International sales edged up to 13,719 from 12,629. Worldwide shipments of motorcycles in the quarter totaled 80,578 units, slightly ahead of the company's forecast.

Third-quarter gross margin improved to 38% of revenue in 2004 compared to 35.6% in the prior year's quarter.

Shares fell 27 cents, or 0.4%, to $59.47 in premarket trading.