Harman Returns To Black In Q2, First Half

By Joseph Palenchar -- TWICE, 2/8/2010

Stamford, Conn. - Harman International posted a net profit in its fiscal second quarter and first half following four consecutive quarterly losses.

 The automotive, consumer and pro divisions all posted operating incomes for the quarter and half on rising fourth-quarter sales.

Company-wide net sales rose 24 percent for the second quarter ending Dec. 30 to $937 million and rose 4 percent in the first half to $1.7 billion, including the impact of currency fluctuations. Sales would have been up 15 percent for the quarter and 2 percent for the half if currency fluctuations were excluded.

 The company posted $39 million in fourth-quarter operating income and $38 million in first-half operating income, while net income hit $16 million for the quarter and $7 million for the half. The impact of currency fluctuations on these figures was not measurable, the company said.

 Net losses in the preceding four quarters were $317 million in the second quarter of fiscal 2009, $49 million in the third quarter of 2009, $62 million in the fourth quarter of 2009, and $9 million in the first quarter of 2010 ending Sept. 30, 2009.

 In the consumer division, sales grew 10 percent for the second quarter of fiscal 2010 to $127 million but fell 3 percent for the half to $211 million, including currency changes.  Fourth-quarter sales would have been up only 1 percent if currency changes were excluded, and first-half sales would have been down 6 percent.

 Sequentially, consumer sales were up 52 percent from the first quarter. On a non-GAAP basis, consumer gross margins in the second quarter increased 4.9 percentage points to 27.8 percent, primarily because of cost-savings initiatives.

In the automotive division, sales grew 29 percent in the quarter to $668 million and 7 percent for the half to $1.21 billion when the impact of currency changes is included.  Automotive operating income was $30 million for the quarter and $25 million for the half.