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Pioneer Posts Q3 Losses, Plans Home A/V Spinoff

Kawasaki, Japan — Plummeting home electronics sales in Japan and falling sales of optical-disc drives yielded a third-quarter operating and net loss at Pioneer. 2/12/2013 07:40:00 AM Eastern

Kawasaki, Japan — Plummeting home electronics sales in Japan and falling sales of optical-disc drives yielded a third-quarter operating and net loss at Pioneer.

The company also announced plans to lay off 800 regular and temporary employees in Japan, reduce the salaries of officers and employees, and realign the home A/V business with related businesses to spin them off to create a new, leaner company.

The related businesses will presumably include the company’s DJ business. Addition details of the spin-off plan were unavailable.

In the optical-disc business, the company said it will undertake “further downsizing,” and in its car electronics business [OEM and aftermarket], Pioneer said it would “thoroughly review every process at our business, from development, production to sales and marketing” as part of a cost-structure review.

Pioneer, which employs about 34,000 people worldwide, shrank its fiscal 2013 third-quarter net losses by 72 percent to 2.26 billion yen from a year-ago loss of 8.1 billion yen, but the company attributed much of the shrinkage largely to a year-ago extraordinary loss of 3.79 billion yen from the introduction of a defined contribution pension plan. Net losses for the nine-month period, however, grew 48 percent to 9.76 billion yen from the year-ago period.

Operating losses rose 4 percent in the quarter to 1.77 billion from the year-ago 1.7 billion yen. For the nine-month period, the company posted operating income of 1.38 billion, down 74 percent from the year ago’s 5.3 billion in operating income.

Revenues grew 2.6 percent revenue gain in Pioneer’s fiscal 2013 third quarter to 104.5 billion yen and by 4.3 percent for the nine-month period to 329.1 billion yen.

The company attributed its third-quarter performance to “a decline in gross profit resulting from decreased sales of optical-disc-drive-related products despite an increase in gross profit in line with higher sales of car audio for the consumer market and of car navigation systems for the OEM market.” The company also pointed to a 52 percent decline in home A/V sales in Japan in the quarter to 6.9 billion yen.

The company called its home electronics business — which includes home A/V, DJ and optical-disc drives — “unprofitable,” with an operating loss in the quarter of 1.67 billion yen, compared with a year-ago operating income of 224 million yen.

In the quarter, car electronics sales rose 17.5 percent to 68.6 billion yen, “with growth in consumer-market products, primarily in Europe, more than offsetting a decline in OEM sales in Japan and China.” OEM sales accounted for 52 percent of the quarter’s car electronics sales.

 For the nine-month period, car electronics sales were up 21.9 percent to 227.6 billion yen

For the quarter, home electronics sales were down 25.5 percent to 24.8 billion yen, and they were down for the nine-month period by 29 percent to 69 billion yen.