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Pioneer Posts Flat Sales, Lower Net Income

11/09/2011 02:44:14 PM Eastern

Tokyo - Pioneer reported relatively flat sales, lower net
income but higher operating income for its fiscal second quarter, ended Sept.
30.

Consolidated net
sales declined 1.1 percent to 115,602 million yen compared with last year's
second quarter. Although car navigation systems showed strong sales in Japan,
the Japanese yen's appreciation against the U.S. dollar, combined with lower
sales of optical-disc-drive-related products and a decline in car audio sales,
mainly at the OEM business as a result of the Japan earthquake and tsunami,
resulted in an overall decline, Pioneer said.

Net income
declined 82.8 percent to 1,212 million yen compared with the prior year's
second quarter. During the quarter, the average value of the Japanese yen
appreciated 10.3 percent against the U.S. dollar, and was almost unchanged
against the euro, compared with the second quarter of fiscal 2011.

There was a 17.4
percent increase in operating income from the second quarter of fiscal 2011, to
5,050 million yen, thanks to reductions in selling, general and administrative
(SG&A) expenses, the company said.

By category, in
car electronics sales increased 10.8 percent year on year, to 70,805 million
yen, despite the negative impact of the Japanese yen's appreciation. In-car
navigation systems, consumer-market sales rose, due to very strong sales in
Japan. OEM sales grew as well, because of an increase in dealer option sales in
Japan, the company said.

In car audio
products, consumer market sales declined overall despite an increase in Europe.
This drop in sales reflected a decline in Central and South America due to a
delay in the introduction of new models as a result of the earthquake. OEM
sales also declined, on lower sales in China and North America, from lower OEM
orders owing to the earthquake, Pioneer reported.

OEM sales
accounted for 42 percent of total car electronics sales, compared with 45
percent in the second quarter of fiscal 2011.

Operating income
in this segment declined 1.9 percent due to an increase in SG&A expenses,
combined with the effects of the earthquake, while gross profit rose, in line
with an increase in sales, to 3,613 million yen.

Home electronics
sales declined 17.5 percent year on year, to 33,520 million yen. Although sales
of A/V systems rose, the decline reflected a drop in sales of optical-disc-drive-related
products, Pioneer said.

This drop was the
result of a decrease in sales of these products for PCs, in addition to the
slowing down of the special demand for these products for A/V equipment
associated with the shift to digital terrestrial broadcasting in Japan in July
2011, the company said.

Operating income
in this segment grew 2.3 times compared with the second quarter of fiscal 2011,
to 1,619 million yen, as reductions in SG&A expenses more than offset the
decline in sales.

In the others
segment, sales declined 8.2 percent year on year, to 11,277 million yen, mainly
from lower sales of electronic devices and parts and of speaker units for
cellular phones, which more than offset higher sales of factory automation
systems. Pioneer said operating income declined 83.1 percent, to 143 million
yen, owing to lower sales and a weaker gross profit margin, despite a reduction
in SG&A expenses.

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