Harley-Davidson Swings to Loss, Shares Sputter

The recession continued to hammer Harley-Davidson (HOG) in the fourth quarter as the iconic motorcycle maker reported a wider-than-expected loss. The latest results mark the sixth consecutive quarter in which Harley has failed to meet Wall Street estimates. Shares fell sharply on the news.Harley, whose high-end bikes cost as much as $25,000, has seen shipments and sales tumble as the recession has made expensive, discretionary purchases too much of a reach for too many of its customers. The company has been going through a brutal restructuring this year amid the downturn, but continued to miss Street forecasts by a wide margin.

For the three months ended Dec. 31, the Milwaukee company swung to a net loss of $218.7 million, or 94 cents a share, from a year-ago profit of $77.8 million, or 34 cents. Excluding discontinued operations, Harley reported a loss of 63 cents a share, missing analysts' average forecast by a stunning 31 cents, according to Thomson Reuters.

Sluggish demand caused revenue to tumble 40% to $764.5 million from $1.28 billion a year ago. The top-line figure essentially matched analysts' view, but gross margin contracted sharply amid a 53% decline in shipments.

"Our full-year 2009 results were affected by the difficult economy, as well as the planned actions we took that resulted in restructuring charges of $224 million," said Chief Executive Keith Wandell in a statement. "We are confident we have made the right decisions for our future, and we are executing our strategy with focused intensity."

William Blair & Co. analyst Sharon Zackfia told clients ahead of the report that Harley is likely several quarters away from achieving positive sales trends in the U.S.

For the full year the company reported a net loss of $55.1 million, or 24 cents, versus year-ago earnings of $654.7 million, or $2.79. Revenue declined 23% to $4.29 billion from $5.58 billion a year ago.
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