Pioneer CE Sales Rise 12%, Loss Cut

By Jeff Malester -- TWICE, 1/31/2006

Tokyo — Overall home electronics sales at Pioneer climbed nearly 12 percent in the company’s fiscal third quarter, reaching $984.7 million, up from $879.3 million in the same quarter the previous year.

Although sales of DVD recorders and players declined in the company’s consumer electronics segment, plasma-display sales rose by about 30 percent, mainly due to higher sales in North America and Europe, with stronger demand primarily for high-resolution models. In addition, Pioneer enjoyed higher sales of newly developed DVD drive units for camcorders.

The company’s home electronics business improved its operating loss for the third quarter, ended Dec. 31, coming in at a negative $14.8 million, compared with a loss of $24 million in the same quarter in 2004. This mainly reflected the discontinuation of sales of cable TV set-top boxes in North America, due to deteriorating profitability.

In Pioneer’s car electronics business, third-quarter sales jumped 21.7 percent, hitting $722.2 million, compared with a year-on-year $593.5 billion. The company posted higher car-audio product sales in both its consumer and OEM markets, with consumer sales expanding in North America.

Car navigation system sales were on the rise, and OEM sales were up in North America. Overall OEM sales represented 34 percent of total car electronics sales in the third quarter, compared with 35 percent in the same three months the prior year.

Car electronics segment operating income soared 57.5 percent in the third quarter, reaching $40.8 million, up from a year-ago $25.9 million.

For the nine months, home electronics sales rose just over 10 percent to $2.2 billion from a year-earlier $2 billion. However, the company’s operating loss for the period increased to $232.5 million, compared with a loss of $60.6 million in the same period in 2004.

The car electronics business for the nine months rose 9.5 percent, reaching $2.1 billion, up from $1.9 billion in the same period a year ago. Operating income slipped just over 7 percent to $110.8 million, from $119.4 million the previous year.

Higher sales of plasma displays and car electronics products pushed up consolidated three-month Pioneer revenue by 16 percent to $1.9 billion, from $1.7 billion in the same three months in 2004.

Operating income for the period nearly tripled in the quarter, increasing to $42.8 million from $15.4 million, supported by higher gross profit due to sales growth, although the cost-of-sales ratio deteriorated due to falling prices of core products.

However, consolidated net income was down over 21 percent in the nine months, to $11.9 million from $15.2 million, due mainly to the impact of a foreign exchange loss and higher income taxes.

In the nine months, consolidated revenue rose 6.7 percent to $4.9 billion from $4.6 billion. Pioneer reported an operating loss of $96.7 million for the period, compared with operating income of $129.5 million in the first nine months of 2004. Net loss for the nine months was $482.4 million, compared with net income of $56.2 million year-over-year.