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Alpine Swings To Black But Forecasts Tough Fiscal 2012

7/11/2011 09:03:36 AM Eastern
Iwate, Japan - Alpine increased sales and swung into the black for its fiscal year ending March, reversing two consecutive years of net losses and three consecutive years of sales declines.

Alpine posted a net profit of 6 billion yen ($73.8 million), compared with the previous year's net loss of 1.25 billion yen ($14.8 million) and a 2009 net loss of $115.3 million, calculated at an exchange rate of approximately 80 yen to the dollar.

Because of the aftereffects of the country's recent disasters and other factors, however, Alpine forecast declining sales and profits in the current fiscal year.

For the fiscal year that just ended, Alpine's OEM and aftermarket car electronics sales grew 19.4 percent to 201.2 billion yen ($2.48 billion), and operating income hit 11.1 billion yen ($136.8 million), compared with the previous year's 0.2 billion yen ($2.5 million). Income would have been higher had it not been for an extraordinary loss of 1.5 billion yen ($18.4 million) resulting from the recent twin disasters.

For the current fiscal year ending March 2012, Alpine forecast net sales to decline 5.6 percent, operating income to drop 55 .2 percent, and net income to drop 42 percent.

 The Japanese economy, higher prices for raw material, a strong yen and losses from the recent earthquake "have rendered the outlook for the business climate that much harsher," the company said. "In addition to problems in the supply of components and material procurements due to severed supply lines, with the assumed imposition of energy-saving measures during the summer hitting production lines, and lower sales on restraint in propensity for consumption, we forecast that the situation will be harsh for both the audio products segment and the information and communication equipment segment."

For the just-ended year, the information and communications segment, including OEM and aftermarket navigation, increased sales 33.9 percent to 131.3 billion yen. Sales of aftermarket and OEM car audio products fell 0.8 percent to 69.8 billion yen.

In audio, intensified price competition contributed to flat sales of aftermarket head units such as CD players, the company said. Sales of affordably priced CD players were firm in the North American market, "but amid users' greater appetite for low prices, high-added-value products, such as head units that can be linked to Pandora Internet radio via smartphones, experienced harsh selling conditions."

 Sales of OEM audio products to automobile manufacturers "increased in line with recovering production and sales in Europe and the United States of new automobiles by major customers, as well as robust demand in the Chinese market," Alpine said.

In the information and communication segment, the company said sales of affordably priced navigation systems in North America "were strong, thanks to customer appreciation of the superior functionality, despite being affected by increasingly severe price competition," the company said. In the segment's OEM business, installation rates of in-cabin display products boosted unit sales, the company added. OEM was also boosted by "a continuing recovery in production and sales of large and high-end vehicles in North America, which have high installation rates for highly functional products such as navigation systems."
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