Hauppauge, N.Y. -Audiovox reported a 42 percent drop in overall sales leading to a $3.9 million net loss for its first fiscal quarter.
Although sales in its electronics subsidiary remain strong - with mobile video systems and consumer electronics lines showing the greatest increases in the most recent reporting period - sales dropped to $191 million, down from $331.1 million in the year-ago period.
Audiovox recorded a net loss of $3.9 million for the first quarter, ended Feb. 28, after a cumulative effect of change in accounting principle of $240,000, compared with net income of $2.6 million in the same three months a year ago.
Much of the company's sales shortfall can be attributed to its wireless subsidiary. 'First quarter wireless sales were adversely effected by a delay in carrier approvals of our new 1X phones, which required software modifications to correct a chipset issue,' said John Shalam, chairman/CEO. Shalam went on to say Audiovox 1X phones now are being tested by carriers and the company expects approvals shortly.
Audiovox expects that its new products, which center on 1X technology, will help restore margin and profit during the second six months of the year. Included among these products is its Thera, which combines Microsoft Windows powered Pocket PC 2002 software with wireless hand set connectivity, for seamless Internet access, according to the company.
Among the electronics subsidiary products showing the most solid sales increases in the quarter were mobile video systems and CE lines, said the company. Audiovox said sales of mobile video continued strong through the first quarter, despite the end of zero percent financing.
The company expects the first half of fiscal 2002 to continue to be affected by the delay of its 1X product introductions, as well as an overall reduction in category demand and intense price competition.