DOW JONES NEWSWIRES
Harman International Industries Inc. (HAR) swung to a fiscal
fourth-quarter loss as the company recorded higher restructuring
charges and slumping revenue and margins.
Still, Chairman and Chief Executive Dinesh Paliwal said the
company's cost savings initiatives, launched more than a year ago,
were ahead of target in delivering sustainable benefits.
The unprecedented downturn in the automotive industry has hurt
Harman, which relies on auto-related sales for 70% of its business.
To compensate, the maker of audio equipment and GPS devices has
been reducing costs, including 2,000 layoffs in the most recent
fiscal year and selling its 50% stake in a South Korean venture. An
$8 billion leveraged buyout of Harman also failed last year, one of
the biggest LBO failures of the credit crisis, though the company
has remained the subject of takeover speculation.
For the quarter ended June 30, Harman posted a loss of $62
million, or $1.05 a share, compared with earnings of $32 million,
or 54 cents a share, a year earlier.
Excluding restructuring and goodwill charges, the company
reported a loss of 45 cents a share, compared with year-earlier
earnings of 68 cents.
Revenue decreased 37% to $668 million.
A survey of analysts by Thomson Reuters had predicted a loss of
60 cents a share on revenue of $669 million.
Gross margin dropped to 21.3% from 26.5%.
Automotive sales slumped 40%, or 34% excluding the effects of
foreign exchange, while the consumer and professional segments saw
sales fall 37% and 33%, respectively.
Harman shares were inactive in after-hours trading Wednesday at
$27.07. The stock has more than doubled from an eight-year low in
March, although it is off its year-ago level by a fifth.
-By John Kell and Joan E. Solsman, Dow Jones Newswires;
212-416-2480; john.kell@dowjones.com