Pioneer Posts Lower Sales In Fiscal Q3

By Steve Smith -- TWICE, 2/9/2010

Tokyo - Pioneer reported lower net sales in its fiscal third quarter ended Dec. 31, 2009, and posted an operating profit and an improved net loss for the period.

Consolidated net sales decreased 9.3 percent from the quarter of fiscal 2009 to $1.29 billion. This was mainly the result of lower sales in the plasma display business, from which Pioneer will withdraw.

Pioneer recorded operating income of 1.003 billion yen or $10.9 million, compared with an operating loss of 11.35 billion in the third quarter of fiscal 2009.

This change primarily reflected improvement in the gross profit margin and lower selling, general and administrative (SG&A) expenses, mainly owing to benefits from restructuring, despite the drop in net sales, Pioneer said.

The net loss improved to 3.873 billion yen ($42.1 million), compared with 29.9 billion yen in the third quarter of fiscal 2009. In addition to improved operating profitability, the smaller net loss reflected the absence of a loss on valuation of investment securities recorded in the third quarter of fiscal 2009, the company said.

Car electronics sales decreased 2.4 percent year on year to $703.8 million because of lower sales of car navigation systems, despite higher car audio product sales. In car navigation systems, consumer-market sales declined year on year, mainly due to lower sales in Japan. OEM sales decreased because of lower sales in Japan and North America. In car audio products, consumer-market sales in North America were lower.

Total OEM sales in this segment accounted for approximately 47 percent of car electronics sales, mostly the same as the

corresponding period of the previous fiscal year.

This segment recorded operating income of 2.176 billion yen or $23.7 million, compared with an operating loss of 1.2 billion yen in the third quarter of fiscal 2009.

This was mainly due to a drop in fixed cost, mainly owing to benefits from restructuring, despite a decline in production volume.

Home electronics sales decreased 24.4 percent year on year to $422.3 million, due to lower sales of plasma displays and DVD drives, despite higher sales of Blu-ray Disc-related products as an optical-disc joint venture commenced operations.

This segment recorded an operating loss of 2.318 billion yen or $25.2 million, compared with 9.752 billion yen in the third quarter of fiscal 2009. The smaller operating

loss reflected a decline in fixed cost, mainly owing to benefits from restructuring, the company said.

In the company's "others" segment, sales increased 14.7 percent year on year to $167.9 million, due to increased royalty revenue from patents related to optical disc technologies, as well as higher sales of electronics devices and parts, and business-use A/V systems. This was despite lower sales of factory automation systems, Pioneer said.

Operating income in this segment was 1.368 billion or $14.9 million, compared with an operating loss of 624 million in the third quarter of fiscal 2009. This change was mainly due to increased royalty revenue from patents related to optical disc technologies, Pioneer said.