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Harman: Carrier Stores Driving Home Audio, Multimedia Sales

5/05/2013 08:00:00 PM Eastern

STAMFORD, CONN. – Harman reports its home audio and multimedia sales grew 17 percent in its fiscal third quarter, due to expanded distribution in the U.S., such as Sprint-owned stores.

Chairman Dinesh Paliwal attributed much of the growth to the expanded distribution here and in emerging markets. In the U.S., Harman launched multimedia products through Sprint-owned stores, which number about 1,000. Harman will also enter into relationships with AT&T and Verizon Wireless, he added.

Paliwal said operating margins hit the high single digits in the three-month and nine-month periods, but did not reveal specific dollar volumes.

He did note the segment’s nine-month operating margin hit a record-high 8 percent. He also said he expects full-year home/multimedia sales to be “close to $600 million.”

Sales of consumer products carried over “strong momentum” during the holiday selling season into the latest quarter, he said. “I am very pleased with the turnaround in this business,” Paliwal said during an analyst’s conference call.

During the past six months, he also noted, the company sold more than 1 million wireless-audio products, marking a record.

Going back as many as 10 years, Paliwal said, the home/multimedia segments were “loss makers” or “at best” delivering low-single-digit margins.

Declines in third-quarter OEM car audio and infotainment- system sales, however, offset the home product gains, which account for a minority of Harman sales.

Net sales were down 3 percent in the quarter to $1.06 billion and down 5 percent for the year to date to $3.12 billion.

Operating income fell in the third quarter by 36 percent to $38 million and by 19 percent in the three-quarter period to $186 million.

Net profits fell 80 percent in the quarter to $35 million and by 51 percent to $137 million in the nine-month period.