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Pioneer Fiscal Q1 Profit Climbs 7%

8/06/2001 02:00:00 AM Eastern

Although the U.S. economy weighed heavily on broad-based sales at audio-equipment maker Pioneer, strong demand for DVD players and car audio products helped boost fiscal first-quarter net profit by 7.1 percent. Pioneer said it earned $24.2 million during its first three months, compared with $22.6 million in the year-ago first quarter.

Hit hard, however, by slowing demand in the United States, Pioneer's overall operating revenue, including net sales and royalty revenue, dipped 1 percent to $1.13 billion, down from $1.14 billion in the same quarter last year.

Sales in the company's electronics business dipped 1.7 percent to $1.03 billion, down from $1.05 billion in the year-ago first quarter.

Demand for audio and video products declined dramatically in North America, said Pioneer, with overseas sales dropping 11.7 percent to $200.1 million in the first quarter, compared with $226.6 million in the year-ago three months. This drop reflected weaker demand for A/V products, despite the depreciation of the yen against the U.S. dollar.

Sales of audio and video products, overall, dropped 12.9 percent to $270.1 million in its first three months, compared with $310.1 million in the same quarter in 2000. However, the company said DVD players still were selling well, as were new-car navigation systems.

Car electronics sales increased 5.4 percent to $509.9 million, compared with $483.7 in the same quarter last year. Overseas, car electronics sales remained flat, compared with the previous year, reaching $304.4 million.

Overseas sales of other electronics products also remained flat at about $150.9 million, due to a reduction in DVD-ROM drive sales and the favorable impact of good initial sales of DVD-R/RW drives.

Overall operating income climbed 11.2 percent to $41.3 million during the fiscal first quarter, compared with $37.1 million in the year-ago period. This was achieved despite a decrease in sales, and reflects the improved gross profit margin, said Pioneer. As a result, net income for the first quarter was up 7 percent to $24 million, compared with $22.5 million in the same three months in 2000.

Looking ahead, Pioneer expects overall sales in its fiscal year to increase 11.3 percent to $5.8 billion. The net-profit increase for the fiscal year is forecast at 14.8 percent, to $169.2 million, according to the company.

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