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MarketPulse: Traders Hit Brakes on Harley-Davidson After Sales Slip

Investing.com - Harley-Davidson skidded Tuesday, dragging consumer discretionary stocks through the mud, after rolling out fourth-quarter results that fell short of estimates.

Harley-Davidson (NYSE:HOG) reported fourth-quarter earnings of $0.17, below consensus of $0.28, and revenues of $956 million missed expectations. Its shares fell 7%.

Worldwide retail sales of motorcycles fell 6.1% to 228,000 for 2018 from a year earlier, as a 10% slump in U.S. sales weighed.

The motorcycle manufacturer expects to ship 217,000 to 222,000 motorcycles this year, after bike shipments dropped to 229,000 in 2018.

Analysts flagged the ongoing drop in the company's U.S. retail sales as a concern and warned there's more road for further downside.

"U.S. retail sales continued its downward trajectory and remains a source of concern," Stifel said. The company's 2019 shipment guidance implies levels not seen since 2009-2010 and will likely drag estimates lower, it added.

Harley's downbeat results kept the consumer discretionary sector in the red even as Whirlpool rallied on fourth-quarter quarterly results.

Whirlpool (NYSE:WHR) rose 8%, shrugging off a dour outlook on full-year earnings. The major appliance manufacturer's fourth-quarter earnings topped expectations, but revenue fell short as sales declined in Latin America and the company’s Europe, Middle East and Africa segment.

The company reported earnings of $4.75 a share, above expectations for $4.24. But revenue of $5.66 billion missed consensus of $5.76 billion.

The company guided full-year earnings in a range of $14 to $15, below Wall Street estimates for $15.99, citing cost inflation, currency headwinds and a higher tax rate.

Analysts said they continue to see more pain ahead for the appliance maker in the wake of slowing U.S. housing market and a global economy expected to weaken in 2019.

"On today's call, Whirlpool did not address a more uncertain and slowing global economy, but it is reflected in earnings guidance," said CFRA, an independent research provider.

The S&P 500 Consumer Discretionary index fell 0.8%

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