Harman beats Street as demand grows for car audio systems

Reuters News
Posted: Aug 06, 2013 9:16 AM

(Reuters) - Audio equipment maker Harman International Industries Inc, whose brands include JBL and Harman Kardon, reported better-than-expected quarterly results as demand rose for its vehicle systems.

Harman's biggest business, which provides integrated navigation, entertainment and communication systems, reported a 4 percent rise in revenue.

The business caters to luxury carmakers such as Daimler AG, Fiat SpA's Ferrari sports cars and Volkswagen's Audi brand.

Sales to German carmakers accounted for 43 percent of Harman's revenue for the year ended June 2012, with the rest of Europe bringing in another 20 percent.

There are indications that the European car market, where sales have dropped to a two-decade low, might have bottomed out, with the region's two top carmakers — Daimler and Volkswagen —reporting healthy profits for the second quarter.

Net income fell to $5.5 million, or 8 cents per share, in the fourth quarter, from $49.3 million, or 69 cents per share, a year earlier.

Harman recorded restructuring and other charges of $72 million in the quarter, related to the divestiture of a manufacturing operation in Germany and customs duties.

The company earned 91 cents per share on an adjusted basis.

Revenue rose 8 percent to $1.18 billion.

Analysts on average had expected earnings of 86 cents per share on revenue of $1.14 billion, according to Thomson Reuters I/B/E/S.

Shares of the Stamford, Connecticut-based company closed at $59.54 on the New York Stock Exchange on Monday. They rose 1 percent in premarket trading on Tuesday.

(Reporting by Neha Alawadhi in Bangalore; Editing by Joyjeet Das)