(Bloomberg) -- Harley-Davidson Inc. shares jumped more than 20% on better-than-expected profit as Chief Executive Officer Jochen Zeitz’s moves to cut costs and boost margins on a smaller revenue base paid off in the third quarter.The Milwaukee, Wisconsin-based manufacturer reported adjusted earnings per share of $1.05 on Tuesday, beating analysts’ consensus of 29 cents. In line with Zeitz’s strategy of shrinking supply and shoring up pricing, the company said dealer inventory fell more than 30% compared with a year ago, and it was able to charge asking price for 2020 model-year motorcycles in the quarter.Zeitz, the former CEO of sneaker company Puma SE, has narrowed the motorcycle maker’s focus to core markets and model segments and scaled back ambitions for expansion overseas. Motorcycle sales in the U.S., Harley’s biggest market, logged a 15th consecutive quarterly decline -- falling 10%. But that was better than the 27% drop in the previous quarter.The company didn’t issue guidance for full-year earnings, citing uncertainty related to the pandemic.Harley shares soared 21% to $34.96 as of 9:46 a.m. in New York. The stock has declined about 6% this year.Global RetreatHarley said it’s exiting 39 markets where weak volumes and profits don’t generate enough cash to support investment. It will focus on 50 key markets, and in 17 of those it will rely on outside distributors to sell bikes. It plans to deliver its motorcycles in India through Hero MotoCorp Ltd. after announcing it is pulling out of the country last month.Zeitz is bringing in new talent to help carry out his transformation of the 117-year-old manufacturer. He replaced the company’s veteran chief financial officer with Gina Goetter, an executive from Tyson Foods Inc., last month and created the role of chief digital officer to revamp Harley’s online retail platforms.Motorcycle and related products revenue fell 10% from a year ago to $964 million after Harley postponed its traditional August launch of new products until early 2021. But those sales still surpassed analysts’ consensus for $843.7 million.What Bloomberg Intelligence SaysHarley-Davidson’s strategy to manage down motorcycle volume and reduce its global presence drove prices higher to MSRP in 3Q but basically concedes its purposely smaller scope and scale is the only way forward after several abandoned growth plans. The 30% cut in inventory and exit from 39 markets -- due to weak volume and lack of profitability -- may never reverse, leaving Harley a more profitable, niche motorcycle maker by giving up on emerging markets as a driver of future growth.\-- Kevin Tynan, global autos analystClick here to read the researchThe restructuring steps have starved dealers of new bikes to shrink inventory and improve pricing. Kevin Kodz, owner of Classic Harley-Davidson in Leesport, Pennsylvania, said he’s making about $500 more per sale on new bikes.“Because inventory is scarce, margins are through the roof,” Kodz said. “You’re doing very little discounting, deal matching, both new and used, there’s not product out in the market.”Since taking over as acting CEO in February, Zeitz has announced plans to cut roughly 14% of the workforce, prune its dealer network and delay product launches. He was officially appointed CEO in May.He plans to unveil a new strategic five-year plan, which he’s dubbed “Hardwire,” a play on Harley’s Livewire electric motorcycle, before the end of the year.(Updates share price in third paragraph, adds dealer comment in eighth)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.