Harley-Davidson brakes on lower shipment forecasts

Harley-Davidson shares were the biggest decliners on the S&P 500, after the company lowered its 2015 motorcycle shipment forecasts and first-quarter sales in the US, its largest market, declined.

The Milwaukee, Wisconsin-based company expects to ship between 276,000 to 281,000 motorcycles in 2015 - about 2-4 per cent more than last year. But that figure fell short of its previous forecast of 282,000 to 287,000 motorcycles.

Harley, which derived just over 35 per cent of its sales outside the US last year, reported a 1.1 per cent sales drop in the first quarter in Asia Pacific and a 5.6 per cent drop in Europe. Sales in Latin America edged up 0.3 per cent and were 5.7 per cent stronger in Canada.

However, in the US, the company said aggressive discounting in the motorcycle market weighed on results. There, sales were down 0.7 per cent from a year ago to 35,730.

"We had picked up on a number of these promotions coming from Japanese manufacturers in [the] first quarter, and while most of our dealer contacts believed that the competitive environment had much of an impact on their higher-end sales, we believe the entry-level bikes are much more at risk to competitors' actions," said James Hardiman, an analyst at Wedbush.

Overall, Harley's profits rose to $269.9m, or $1.27 a share, from $265.9m, or $1.21 a share, a year earlier. Revenues declined 3 per cent to $1.67bn.

Shares of Harley-Davidson, which have fallen 7 per cent in the past year, declined 8 per cent on Tuesday to $61.77.

Athletic apparel maker Under Armour, issued full-year sales guidance that missed Wall Street forecasts, despite the success of US golfer Jordan Spieth, who won the US Masters while wearing the company's attire.

The company lifted its full-year revenue forecast to $3.78bn, from $3.76bn, but the guidance fell short of estimates for $3.81bn.

The outlook came alongside a drop in first-quarter profits. The Baltimore, Maryland-based company reported profits of $11.7m, or 5 cents a share, in the three months ended in March, compared with $13.5m, or 6 cents a share, in the same period a year ago. Sales climbed 25 per cent to $804.9m.

"As far as we're concerned, Under Armour just needs to keep doing what it's doing because the results are impressive," said Randall J Konik, an analyst at Sterne Agee. "From a stock perspective, however, we see few near-term catalysts to drive share price appreciation . . . and increasingly high expectations that are getting harder and harder to beat," he added.

Shares of Under Armour fell 3 per cent to $84.98.

United Technologies shares gained 1 per cent to $118, after the US industrial conglomerate said first-quarter profits topped Wall Street forecasts. However, sales declined 1 per cent to $14.5bn, missing estimates, as the strong dollar weighed on results.

New York-listed shares of Israeli drugmaker Teva Pharmaceuticals rose more than 2 per cent to $64.88, after the company offered to buy US drugmaker Mylan.

Teva offered $82 a share in cash and stock for each Mylan share, valuing the company at $40.1bn. Mylan shares rose 9 per cent to $73.95.

Healthcare stocks led the S&P 500 higher as US stocks fluctuated between losses and gains.

The S&P 500 rose 0.1 per cent to 2,102.51 and the Dow Jones Industrial Average slipped 0.2 per cent to 17,997.26. The Nasdaq Composite rose 0.5 per cent to 5,020.75.

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