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Pioneer Net Loss Widens In Q1

Kanagawa, Japan — Pioneer posted a 2 percent decline in net sales and more than doubled its net loss in its fiscal first quarter ending June 30. 8/12/2013 11:29:00 AM Eastern

Kanagawa, Japan — Pioneer posted a 2 percent decline in net sales and more than doubled its net loss in its fiscal first quarter ending June 30.

 The company revised down its forecasts for the first half and full year.

 First-quarter net sales fell 2 percent to 109.3 billion yen ($1.13 billion) on an operating loss of 7.57 billion yen ($78.4 million) compared with year-ago operating income of 599 million yen ($6.2 million). The net loss grew to 10.1 billion yen ($104.6 million) , up 266 percent from the year-ago net loss of 2.76 billion yen ($28.6 million).

 Despite the “large positive effect” of the yen’s depreciation, sales fell because of lower consumer-market sales of car navigation systems and a decline in sales of optical disc drive-related products, the company said. During the first quarter of fiscal 2014, the average value of the yen declined 18.8 percent against the U.S. dollar and 20.2 percent against the euro year on year, the company noted.

 The operating loss was mainly the result of a decline in sales of high-margin consumer-market car navigation systems and the negative effect of foreign exchange rates, the company said. The first-quarter net loss grew mainly because of operating-income deterioration, the company added.

 For the quarter, car electronics sales fell 2.4 percent to 79 billion yen because of a decline in consumer-market sales of car-navigation systems despite an increase in OEM sales, mainly in Central and South America.

 Within the car electronics segment, car audio sales rose. Despite a sales decline in Japan, the impact of the yen’s depreciation led to growth in sales of consumer-market products in Europe and North America and OEM sales in each overseas region, the company explained.

OEM sales accounted for 58 percent of total car electronics sales compared with a year-ago 53 percent.

 By geographic region, car audio sales in Japan declined 16.2 percent to 34.4 billion, while overseas sales grew 11.6 percent to 44.7 billion yen.

The car electronics segment recorded an operating loss of 3.1 billion yen compared with a year-ago operating income of 5 billion yen.

Home electronics sales fell 4.6 percent to 20.4 billion yen despite a gain in DJ equipment sales. Home sales in Japan declined 28.1 percent to 6.3 billion yen, while overseas sales rose 11.6 percent to 14.1 billion yen.

 Segment operating loss was 3.5 billion yen, up from the year-ago loss of 2.8 billion yen.

In forecasting future performance, the company revised down first-half net sales projections to 230 billion yen from a previously forecast 235 billion yen. The company projected a net loss of 5 billion yen compared with a previously forecast net loss of 1.5 billion yen.

 For the full year, Pioneer forecasts net sales of 505 billion yen, down from a previously forecast 515 billion yen, and net income of 500 million yen, down from a previously forecast 6 billion yen.

“In car electronics, we anticipate sales of consumer-market car navigation systems to fall short of our initial target, reflecting weak market conditions in Japan, and sales of car audio products overseas, mainly in emerging markets, to miss our initial target,” the company said. In home electronics, the revised forecast reflects lower sales of optical disc drive-related products and A/V accessories as well as declining profitability in home A/V products, the company said.

 Volume in yen was converted to dollars at an exchange rate of $1=96.5 yen.

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