* First-quarter adjusted earnings $0.79/share vs est $0.78
* Revenue $998 mln vs est $1.08 bln
* Declares a cash dividend of 15 cents
* Shares rise 2.5 percent
By Sruthi Ramakrishnan
Nov 2 Audio systems maker Harman International
Industries Inc said it expects weakness in Europe to
extend through its full year after missing first-quarter revenue
expectations on lower sales to the region.
Carmakers dealing with economic gloom and weak consumer
appetite in the battered European market have talked of capacity
cuts, with several executives indicating that there would be no
rebound within two years.
"We should probably prepare ourselves for the next three
quarters that Europe will not come back as strong as last year
in terms of growth rate," Chief Executive Dinesh Paliwal told
Sales in Harman's biggest business, infotainment, which
provides audio systems to luxury carmakers such as Daimler AG
, Ferrari and Volkswagen's luxury division
Audi fell 7 percent to $561 million in the first quarter
including currency changes.
Daimler AG warned last month that it would miss
its earnings forecast this year and revealed plans to cut 2
billion euros in costs.
Europe is in the same situation that the United States was
in two years ago, Paliwal said.
"I think that is definitely going to be a phenomena. I hope
it is not a long-term phenomena."
Sales to German carmakers accounted for 43 percent of
Harman's revenue for the year ended June 30, with rest of Europe
bringing in another 20 percent.
Harman, which owns brands such as JBL and Harman Kardon,
declared a cash dividend of 15 cents per share for the quarter
ended Sept. 30.
The company said it won contracts from new customers such as
Ford Motor and Volvo Car Corp.
Harman's net income rose to $55 million, or 79 cents per
share, in the first quarter, from $48 million, or 67 cents per
share, a year earlier.
Excluding items, earnings were 79 cents per share.
Revenue fell 5 percent to $998 million.
Analysts on average had expected earnings of 78 cents per
share on revenue of $1.08 billion, according to Thomson Reuters
Shares of the company, which competes with Bose, Panasonic
Corp, Sony Corp and Denso Corp, were
up 2.5 percent at $44.49 on the New York Stock Exchange on