Harley Davidson's

(HDI)

shell-shocked investors caught a break Wednesday when the motorcycle maker reported better-than-expected earnings for the second quarter and raised guidance for the year.

The company also disclosed a

Securities and Exchange Commission

probe into an April business update that lopped about 17% off its market cap.

For the second quarter, Harley earned $237.4 million, or 84 cents a share, compared with earnings of $247.2 million, or 83 cents a share, a year ago. The higher EPS reflects the repurchase of about 20 million common shares this year. Revenue rose 0.4% from a year ago to $1.33 billion.

Analysts were forecasting earnings of 79 cents a share on sales of $1.31 billion in the quarter.

Harley said the share repurchases should help the bottom line for all of 2005. The company sees full-year EPS rising 10% to 13%, up from its previous guidance of 5% to 8%.

According to a release, second-quarter sales of Harley-Davison motorcycles in the U.S. rose 3.2% from a year ago, while European retail sales rose 23% and sales in other international markets rose 11%. The company says it's on track to ship 329,000 Harley-Davidson motorcycles in 2005, up 3.7% from 2004.

The shares jumped $2.55, or 5%, to $52.25 Wednesday morning.

Separately, Harley said the SEC is investigating allegations contained in shareholder suits that were launched after the company guided shipments and earnings lower on April 13. The company said it "isn't surprised" by the inquiry, with which it is cooperating.