UPDATE 1-Harman shashes forecast, shares tumble 33 percent

(Recasts; adds dateline, share fall)

NEW YORK, Jan 14 (Reuters) - Shares of Harman International Industries Inc (HAR.N) lost a third of their value on Monday after the company slashed its fiscal 2008 profit forecast due to pricing pressures on its portable navigation devices.

The shares were down $22.86 to $46.11 in morning trade on the New York Stock Exchange, wiping out more than $1 billion of market capitalization. Harman reported 60.5 million diluted shares outstanding as of Oct. 31.

Harman said it now expects earnings of $3.00 to $3.10 per share for fiscal 2008, ending June 30, before after-tax merger-related costs of $8 million, or 13 cents a share. It said the forecast includes the impact a continuing accelerated share buyback.

In October, Harman had said fiscal 2008 profit would match or exceed the $4.14 a share it earned in fiscal 2007.

Analysts' average forecast was $4.30 per share, according to Reuters Estimates.

Harman, which makes high-end stereo and audio equipment in addition to portable navigation devices, said significant pricing pressure in PNDs is affecting the entire industry.

"Although, we are not happy with the higher-than-planned

(research and development) engineering and material costs, the additional investment is necessary to deliver the new platforms to our valued customers," Chief Executive Dinesh Paliwal said in a statement.

Harman, whose brands include Harman Kardon, JBL and Lexicon, said it is implementing a series of strategic initiatives to optimize its global footprint in manufacturing, engineering and sourcing.

(Reporting by Yinka Adegoke; editing by John Wallace)

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