Harley-Davidson, the largest American motorcycle maker, cut its 2005 profit forecast as demand for its namesake cruisers dropped in the first quarter. The shares fell as much as 19%, the biggest decline in 14 years.

Profit in 2005 will grow 5% to 8%, down from a previous forecast of about 15%, Milwaukee-based Harley-Davidson said in a statement. The average forecast of analysts in a Thomson Financial survey was for a 12% annual rise. First-quarter sales fell almost 1% in America, the company’s biggest market, while net income rose 11%.

Harley-Davidson’s profit growth this year will fall below 10% for the first time since Chief Executive Jeff Bleustein, who steps down this month, took over in 1997.The company yesterday cut its annual production goal by 10,000 units, the first such reduction in 14 years, amid concern inventory is building up after the weaker-than-forecast American sales.

“I’m no longer convinced that some of their production and earnings growth targets are achievable,” an analyst with RBC Capital Markets in Denver, Edward Aaron, said in an interview. He downgraded his rating on the shares yesterday. “Supply has been so far below demand for so long that no one has really known the true level of demand. It’s reasonable to assume that long-term growth is going to be much lower than we’ve seen.” Harley-Davidson’s earnings growth should still expand at a “mid-teens pace” over the longer term, Harley-Davidson’s chief financial officer, Jim Ziemer, said in an interview.

“What’s different this year is that we made a precautionary decision” to reduce production, said Mr. Ziemer, who will become chief executive later this month. “As a result, we won’t get the benefits from those units that we would have otherwise.”

Harley-Davidson gets about 80% of its sales from America and about 10% from Europe, according to company revenue figures. The shares fell $9.84, or almost 17%, to $48.93 in New York Stock Exchange composite trading. It’s the biggest drop since 1991.

First-quarter net income increased to $227.2 million, or 77 cents a share, from $204.6 million, or 68 cents, a year earlier, Harley-Davidson said. Sales of motorcycles, which include its Fat Boy and Road King cruisers, rose 6% to $1.24 billion.

The company quadrupled profit from 1998 to 2004 and tripled its motorcycle sales volume over the past decade. Harley-Davidson has posted an unbroken string of quarterly earnings gains since 1997.

The company cut its forecast for 2005 shipments by 3% to 329,000 motorcycles. That’s up 3.8% from 317,000 in 2004. The earlier forecast was for 339,000 shipments this year.

First-quarter sales rose 21% in Europe, while Japan sales increased 11%. The motorcycle maker said in January it was cutting prices in Europe and offering incentives of $1,000 in accessories for purchasing certain models in America in January and February.

“We were keeping an eye on manufacturer’s recommended sticker prices at the dealerships and incentives and our feeling was it was starting to look more and more like an auto company,” said Tim Edwards, an analyst with GW Hennsler & Associates in Marietta, Ga., which sold its Harley-Davidson shares on March 9. “We were growing concerned about their ability to be able to live up to forecasts.”

Mr. Aaron downgraded his rating of Harley-Davidson’s shares to “sector perform” from “outperform” after the company lowered the production forecast and a goal of building 400,000 cycles in 2007.

A UBS Investment Research analyst in New York, Robin Farley, also said she was reviewing her “buy” rating on the shares and estimates for the company’s earnings for the rest of the year.

Sales of Harley-Davidson brand motorcycles rose 6.6% in the quarter to $979 million, while sales of the company’s Buell sport-bike brand fell 9% to $20 million. Sales of Harley-Davidson parts and accessories rose 4.6% to $177 million and clothing and general merchandise sales increased 9.3% to $59.5 million.

Mr. Ziemer is succeeding Mr. Bleustein, who has held the post since 1997. The company hasn’t had a quarterly profit decline since that year. It sells about half of all American motorcycles with engines 660cc or larger and about one in four worldwide. Honda Motor Company is the world’s largest motorcycle maker.

The company was expected to post a first-quarter profit of 76 cents a share, the average estimate of 18 analysts surveyed by Thomson Financial.