Q2 Audio Sales Rebound, But 1st Half Flat

ARLINGTON, VA.— Factory-level audio sales rebounded in the second quarter by 9.4 percent to $2.04 billion, but the first quarter's 9.1-percent decline kept first-half sales almost flat at $3.63 billion, up only 0.1 percent, CEA statistics show.

June's industry sales rose 7.8 percent to $726 million to almost match the $728 million record set for the month in 2000. Likewise, second-quarter sales rose 9.4 percent to $2.04 billion to almost match the $2.07 billion record set in 2000.

In June and the second quarter, the industry's four core segments posted gains, with components, home systems and portables reversing their first-quarter losses. Autosound growth accelerated in the second quarter to exceed the first-quarter growth rate.

Despite the second-quarter turnaround, first-half sales fell by 1.2 percent in the home component segment to $623 million and by 10.1 percent in portables to $914 million. First-half home-system sales grew only a modest 1.7 percent to $875 million. Autosound sales, on the other hand, grew in both quarters, boosting first-half sales by 9.1 percent to $1.22 billion.

Here are the details on each category's sales for the month, quarter and half:

Home components: In June, sales rose at a double-digit rate for the second consecutive month following four months of declines. June's 10.1 percent gain to $131 million, following May's 10.8 percent gain, contributed to 7.2 percent growth in second-quarter sales to $327 million, their highest level since a 1998 peak. Second-quarter sales have risen only four times since 1995, CEA statistics show.

For the half, sales declined for the sixth consecutive year, but the 1.2 percent drop to $623 million wasn't nearly as bad as last year's second-quarter decline of 13.3 percent.

Home systems: The category revived its image as home audio's growth engine, with sales jumping to record highs in June, the second quarter, and first half. June's sales rose 7.9 percent to $184 million, and second-quarter volume grew 15.7 percent to $520 million. Although the first-quarter's 13.6 percent decline limited first-half growth to 1.7 percent, first-half volume hit a record $875 million.

The category includes shelf and rack systems and home-theater-in-a-box electronics/speaker packages.

Total home audio: Combined sales of components and systems rose 8.8 percent in June to a record $315 million. Second-quarter sales surged 12.2 percent to $847 million but nonetheless fell short of the $856 million second-quarter peak reached in 2000. Because of first-quarter declines, first-half sales were up only 0.4 percent to $1.5 billion, falling short of the $1.6 billion first-half peak reached in 2000.

Portables: Sales (including home radios) gained for the second consecutive month at a single-digit rate following four consecutive months of double-digit declines. June sales grew 7.3 percent to $208 million, but despite the healthy gain, sales were still below the $213 million peak set 13 years ago in June 1989.

For the second quarter, sales grew 2 percent to $558 million, but the first quarter's 23.3 percent plunge pushed first-half sales down by 9.7 percent to $918 million. The category's first-half sales have fallen during six of the past eight years.

Autosound: Despite OEM competition, aftermarket sales drove into the hammer lane, breaking records for the month, quarter and half. June sale's rose 6.7 percent to $203 million. Second-quarter sales rose 13 percent to $637 million, exceeding the first quarter's 5.1 percent gain. First-half sales rose 9.1 percent to $1.22 billion.