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Pioneer Registers Loss As CE Sales Rise 6.6%

10/31/2005 08:10:00 AM Eastern

Tokyo — Plasma sales increased, negating a drop in sales of DVD products, lifting the home electronics business at Pioneer 6.6 percent in the company’s fiscal second quarter, hitting $706.9 million, up from $663.4 million in the same three months last year.

Home electronics, which consists mainly of consumer electronics products, enjoyed a 16 percent jump in overseas sales in the second quarter, ended Sept. 30, reaching $551 million, compared with a year-ago $467.7 million. The increase was due to a rise in sales of plasma displays worldwide, despite a decline in DVD drives for PCs in North America and the discontinuation of sales of cable TV set-top boxes in North America.

Yet Pioneer’s home electronics business registered an operating loss of $113.6 million in the second quarter, compared with operating income of a bit over a quarter-million dollars in the same three months in 2004. Gross profit margin for plasma displays and DVD products dropped due to lower market prices, said Pioneer.

Car electronics sales rose 4.5 percent in the second quarter, coming in at $675.7 million, up from a year-on-year $646.5 million. Car audio product sales were good, although car navigation system sales decreased, due to lower sales in Japan.

Overseas car electronics sales in the second quarter jumped 14.5 percent to $448.8 million from $391.8 million, due to growth in sales of car audio products, and car navigation systems to auto makers in North America.

Car electronics operating income decreased to $25 million in the second three months, down from a $40.3 million in the prior-year period, mainly as a result of a decrease in car navigation systems in Japan.

For the six months, home electronics sales rose 9.4 percent, hitting $1.25 billion, up from $1.15 billion in the corresponding period last year. Overseas sales moved up 14 percent to $941.5 million, from $826.2 million in the first half of the previous year.

The operating loss for home electronics in the first half hit $221.1 million, compared with a loss of $37.1 million in the first six months last year.

In the first half, car electronics sales increased 3.9 percent, reaching $1.39 billion, compared with a year-earlier $1.33 billion. Overseas sales soared 12.6 percent to $900.8 million, from $800.2 million in the year-ago six months.

Operating income for car electronics dipped to $71 million in the first half, down from $94.9 million year-over-year.

First half sales to North America increased 10.1 percent, reaching $800 million, up from $726.8 million in the same period a year earlier. Sales to North America in the first six months produced an operating loss of $15.7 million, compared with operating income of $26.6 million in the same period the previous year.

Pioneer consolidated sales edged upward 2.3 percent in the second quarter, to $1.61 billion, from $1.57 billion in the same quarter in 2004. This mainly reflects increased sales of plasma displays, which compensated for decreased sales of DVD products, said the company.

In the first quarter, Pioneer reported a consolidated operating loss of $65 million, compared with operating income of $72.5 million year-on-year. The loss was principally caused by lower market prices for the company’s main product lineup, due to more severe competition, resulting in a decrease in gross profit margins, said Pioneer.

As a result, the net loss hit $59.8 million in the second quarter, compared with a net gain of $28.6 million in the prior-year period.

For the six months, Pioneer notched a 1.4 percent consolidated revenue gain, to $3.03 billion, from $2.98 billion the previous year.

The consolidated operating loss reached $141.7 million in the first half, compared with operating income of $115.8 million in the same period the prior year. The net loss for the period hit $106 million, compared with net earnings of $41.6 million year-over-year.

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