Harley Davidson (HOG) Weakness Continues

And the weaker continues to get weaker.  Here is a summary of 4Q earnings report on Jan 22:



"HOG reported a larger-than-expected loss for 4Q 2009 on Friday and warned that 2010 would continue to present challenges. Weak consumer spending and tight credit markets created huge headwinds last year. In response, Harley has undertaken a huge and costly restructuring, consolidating production, laying off thousands of workers, discontinuing its Buell bike lines and putting its MV Agusta unit up for sale. 

As a result, Harley-Davidson said it now plans to ship between 201,000 and 212,000 motorcycles in 2010 -- down as much as 10% from 2009 and down more than 40%om the peak in 2006, when the company shipped 349,196 units. For the 4Q, HOG posted a net loss of $218.7 million, or 94 cents a share, compared with a year-earlier profit of $77.8 million, or 34 cents. Analysts expected a loss of just 32 cents. The costly revamp is "critical to restoring greater profitability and long-term growth," Wandell said, and warned that the company would have to spend another $175 million to $195 million in 2010 on the process. HOG total outlays on the restructuring could reach $460 million into 2012, he added. Revenue from sales of Harley motorcycles fell 45.6% to $552.0 million in the 4Q, and shipments fell 53.1%."


Bottom line is there is no way to print a bright future until restructuring steps can produce results.  Right now, shares are breaking down below 200-day MA and put buyers are stepping in.  At 11:30am EST, I see a trader stepped in and bought one block of 9500 contracts of March $22 puts for $1.08 and sold equal number of March $19 puts for $0.25.  The net debit was $0.83 for $3 spread.  The open interest is only 2825 and 651 on those strikes.   


I want to follow the fast money and do the exact same put spread for $0.80 or less.  


Good luck!