Harley profit tumbles on weak U.S. sales

CHICAGO (Reuters) - Harley-Davidson Inc (HOG.N) said on Friday that its quarterly earnings fell 26 percent as sales of its iconic motorcycles tumbled in the United States, its biggest and most important market.

The company reported a fourth-quarter net profit of $186.1 million, or 78 cents a share, compared with $252.4 million, or 97 cents a share, last year.

Sales fell 7.7 percent to $1.39 billion, the company said, pulled down by a 14.2 percent decline in U.S. bike sales.

Analysts, on average, expected the Milwaukee-based company to report a profit of 81 cents a share on sales of $1.34 billion.

Harley blamed the slump on what it called "challenging times in the U.S.," where turmoil in the housing market and a related tightening in credit markets has forced consumers to rein in their spending.

Indeed, sales outside the United States grew during the quarter, led by a 45.9 percent jump in Canadian sales.

In a statement, Jim Ziemer, the company's chief executive, said Harley wasn't counting on a quick rebound in the U.S. market.

"We expect the U.S. economy to continue to be very challenging in 2008, and we will closely monitor the retail environment and regularly assess our wholesale shipments throughout the year," said Ziemer.

(Reporting by James B. Kelleher; Editing by Derek Caney)