Harman exceeds 3Q expectations but shares plunge
Audio and entertainment products maker Harman International Industries Inc. on Thursday posted a third-quarter profit but forecast the compounded annual growth rate of its revenue would slow by fiscal 2013.
Its shares plunged, falling $11.34, or 22 percent, to close Thursday at $39.98.
Harman said its net profit in the three months to March 31 was $18.3 million, or 26 cents per share, reversing a loss in the same quarter a year ago of $68.8 million, or $1.17.
Adjusted for restructuring charges, earnings came to 31 cents per share, above the 29 cents expected by analysts polled by Thomson Reuters.
Revenue rose 42 percent to $848 million from $598 million. That was also better than the $830 million expected by analysts.
But Harman said its revenue was expected to show a compounded annual growth rate of 7 percent to 10 percent through fiscal 2013 — much slower than its current pace. It said it expected earnings per share of $3 to $4 in fiscal 2013.
The company said it was ahead of schedule to reduce permanent costs by $400 million. It said it had achieved $321 million in permanent savings by March 31, ahead of a target of $265 million.
Harman also said it had agreed to buy speaker company Eletronica Selenium SA of Brazil, a transaction it said would be completed in four to six weeks. Terms were not disclosed.
Eletronica Selenium is expected to have annual sales of $60 million in 2010, Harman said. It employs nearly 350 people.