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.
Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.