China sales power Harman profit
(Reuters) - Audio systems maker Harman International Industries Inc (HAR.N) reported better-than-expected quarterly results as sales in China soared, but trimmed its fiscal year 2013 forecast on a weaker euro.
A rise in disposable incomes in China has been boosting demand for the company's audio systems, which include well-known brands such as JBL and Harman Kardon.
However, slowing demand and a weakening of the euro has put pressure on the profits of consumer electronics companies with a large exposure to the region.
"We are feeling cautiously optimistic, but I'd say more towards optimistic because we have secure revenues and we've the technology to convert that," Chief Executive Dinesh Paliwal told Reuters.
He said the company was not seeing any order cut backs from customers and added General Motors Co (GM.N) as a customer with a $900 million contract win last week.
Harman, which mainly provides audio products for luxury car makers such as Audi, Ferrari and Daimler (DAIGn.DE), got a taste of the mid-segment car market last year after it plugged its audio systems into Toyota (7203.T) cars.
Earlier this year, it signed deals with China's Geely Motors and BAIC Motors and India's Tata Motors Ltd (TAMO.NS).
He sees revenue from BRIC (Brazil, Russia, India and China) markets growing to 25 percent of the total revenue by fiscal year 2015 from the current 12 percent.
Sales from Germany accounted for 43 percent of Harman's revenue in fiscal year 2011, while other parts of Europe brought in another 20 percent.
Paliwal said BMW AG (BMWG.DE) will be launching its first car installed with Harman's infotainment system integrating Apple's iPhone, RIM's RIM.TO RIMM.O Blackberry and Android phones in September-October.
"We are also doing the same thing for Daimler AG (DAIGn.DE), which will come out early next year," he said.
Net income for the fourth quarter rose to $49 million, or 69 cents per share, from $18.8 million, or 26 cents per share, a year earlier. Excluding items, the company earned 67 cents per share.
Revenue rose to $1.09 billion.
Analysts on average were expecting fourth-quarter earnings of 65 cents per share on revenue of $1.08 billion, according to Thomson Reuters I/B/E/S.
The company expects full-year profit to be between $3.67 and $3.92 per share, down from its previous forecast of $3.75 to $4.00 per share.
It also cut its revenue forecast to a range of $4.3 billion to $4.6 billion from its previous forecast of $4.55 billion to $4.8 billion.
Harman, co-founded by stereo magnate Sidney Harman, competes with Bose, Panasonic Corp (6752.T), Sony Corp (6758.T) and Denso Corp (6902.T).
The company has also been battling increasing competition from newer rivals Delphi Automotive PLC (DLPH.N) and Germany-based Continental AG (CONG.DE) at its biggest segment, which provides audio systems for luxury cars.
Harman shares, which rose as much as 5 percent in early trading, were trading up 2.5 percent at $43.64 on Friday on the Nasdaq.
(Reporting by Sruthi Ramakrishnan; Editing by Saumyadeb Chakrabarty)
- South Korea recovers first bodies from inside sunken ferry
- Japan expands army footprint for first time in 40 years, risks angering China
- Prosecutors extend Korea ferry captain's detention as death toll mounts |
- South Korea recovers first bodies from inside sunken ferry |
- Mediator heads to east Ukraine, seeking surrenders |