Updated with recent stock price moves.

Harley-Davidson's ( HOG) net income plummeted 91% in the second quarter. Because of lower shipment plans, the company said it will slash another 700 hourly production jobs and 300 non-production positions.

Earnings fell to $19.8 million, or 8 cents a share, from earnings of $222.8 million, or 95 cents a share, posted aear earlier.

Despite it all, investors -- likely buoyed by the layoffs, as investors do love their layoffs -- were sending shares of the company up $1.28, or 7.3%, at $18.77.

The stupendous fall was in part related to a series of charges at its financial services unit and a planned reduction in shipments. The iconic motorcycle manufacturer said that it was taking a $72.7 million credit loss provision for reclassifying its finance receivables, while also writing off $28.4 million in goodwill associated with its purchase of Harley-Davidson Financial Services in 1995.

HDFS recorded a $62.1 million loss in the quarter, compared with income of $37.1 million in the year-earlier period.

Revenue also fell, thanks largely to a 30% drop in worldwide sales. Revenue came to $1.15 billion in the second quarter, compared with $1.57 billion in the year-ago quarter. Sales in the North American region plunged 35%. Still, Harley-Davidson did better than most, with heavyweight motorcycle sales in the U.S. falling 48.1%.

Analysts estimated the company would earn 24 cents a share in the second quarter on $1.18 billion in revenue.

"While the underlying fundamentals of the Harley-Davidson brand remain strong and our dealers' retail motorcycle sales declined less than our competitors, it is obviously a very tough environment for us right now, given the continued weak consumer spending in the overall economy for discretionary purchases," Harley-Davidson CEO Keith Wandell said in a statement.

The Milwaukee-based outfit also lowered its 2009 shipment expectations to between 219,000 and 228,000 motorcycles. Guidance from its last announcement had shipments between 264,000 to 273,000.
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