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Pioneer Reports Revenue Decline

1/31/2008 10:15:00 AM Eastern

Tokyo — Pioneer Electronics on Thursday said its fiscal third-quarter consolidated operating revenue declined 1.7 percent, due in part to decreased sales of plasma displays and DVD recorders.

At the same time, the company said sales of car electronics increased and the company enjoyed the benefits of the depreciation of the yen against the euro.

Pioneer’s consolidated operating revenue for the period was $1,851.2 million, while operating income increased 36.8 percent year-on-year to $60.4 million. This was attributed to higher earnings in car electronics and improved profitability in other segments, despite the decline in the plasma display business, Pioneer said.

Net income decreased 30.7 percent year-on-year to $14.8 million, mainly due to an increase in income taxes in connection with accumulated losses at the parent company, Pioneer Corp., the company said.

Sales in car electronics increased 8.5 percent year-on-year to $813.1 million, although sales of car navigation systems were mostly unchanged. In-car navigation systems, consumer-market and OEM sales both decreased in Japan, but rose in North America, the company said.

For the category, consumer-market sales rose in Central and South America, and OEM sales increased in North America, China and Japan. Total OEM sales for the segment accounted for approximately 40 percent of category sales.

On a geographic basis, sales in Japan remained at $294 million, while overseas sales increased 14 percent to $519.1 million compared with the same period of the previous year.

Operating income in this segment increased 86 percent year-on-year to $51.8 million due to higher sales of car audio products and lower selling expenses for consumer-market car navigation systems.

The company said home electronics sales decreased 9.6 percent year-on-year to $881.7 million.

Overall plasma display sales declined due to decreases in home-use sales in Europe and North America, despite higher home-use sales in Japan, and due to decreases in OEM and business-use sales, Pioneer said. Plasma display sales accounted for approximately 42 percent of home electronics sales.

Sales of Blu-ray Disc-related devices and DVD drives rose, but sales of DVD recorders decreased in the period.

On a geographic basis, sales of home electronics in Japan declined 19 percent to $129 million, while overseas sales decreased 7.7 percent to $752.7 million.

Operating income for the segment was down 72.8 percent year-on-year at $6.8 million. This was attributed to a larger loss in plasma displays in line with lower sales.

Also in the period, royalty revenue from patent licensing declined 57.6 percent to $1.3 million from the third quarter of fiscal 2007, due to the expiration of some patents for optical discs. The segment showed an operating loss of $500,000.

For the nine-month period ended Dec. 31, 2007, consolidated operating revenue decreased 0.1 percent year-on-year to $5,212.3 million.

Operating income was 80.3 million, down 45.3 percent year-on-year. Meanwhile, net income decreased 0.2 percent year-on-year to 102 million, with the decrease limited mainly by a gain on the sale of all land and buildings at the company’s Tokorozawa plant and some at the Omori plant, during the first quarter of fiscal 2008.

Pioneer said it has lowered its previous operating revenue forecast “because plasma display sales are projected to fall below forecasts chiefly in Europe and North America.”

But the company did not revise its income expectations due mainly to expectations of an increase in income from car electronics. The company said it expects improving gross profit margin in this business and higher sales of car audio products for consumer markets in Central and South America, despite larger losses in the home electronics business due to lower plasma display sales.

 

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