Iwaki, Japan - Alpine Electronics sales, operating profits and net profits fell during the first three quarters of fiscal 2012, but raised its fiscal year forecast.
Alpine is optimistic about the full-year results based on gains in navigation system sales in Japan and to European automakers.
For the nine months, ended Dec. 31, net sales were off 1.3 percent to 145.4 billion yen $1.9 billion), operating income fell 53.4 percent to 4.56 billion yen ($59.6 million), and net income fell 54.8 percent to 2.97 billion yen ($38.8 million).
Financial metrics for the third quarter alone were not available.
The currency conversion is based on a rate of 76.5 yen to the U.S. dollar.
For the full fiscal year ending March 31, Alpine is now forecasting net sales of 200 billion yen ($2.61 billion), up from a previously forecast 190 billion yen but still down 0.6 percent from fiscal 2011's 201.3 billion yen ($2.63 billion). Operating income is forecast at 5 billion yen ($65.3 million), up from a previously forecast 3.7 billion yen but down 55.2 percent from fiscal 2011's 11.2 billion yen ($146.3 million). Net income is forecast at 3 billion yen ($39.2 million), up from a previously forecast 2.5 billion yen but down 50.2 percent from fiscal 2011's 6 billion yen ($78.4 million).
If the forecast bears out, Alpine will have posted its second consecutive fiscal year in the black.
Fiscal 2012 sales were revised up because "sales of navigation systems in the Japanese market are robust" and "sales to mostly European automakers are on the rise despite the reduction in unit production resulting from the flooding in Thailand," the company said. Because of the increased sales projections, the company also said it expects income to be higher than previously forecasted.
As for the third quarter ending Dec. 31, Alpine attributed sales and profit declines to reduced Japan economic activity due to the Great East Japan Earthquake, "the appreciation of the yen at unprecedented levels," and reduced production caused by the flooding in Thailand, a base for Japanese manufacturing companies, the company said.
Although the U.S. economy started to show a gradual recovery, Alpine said, "the recurring financial crisis for Euro members became a concern, economic growth in developing countries such as India and China was slowing, oil prices were moving higher, and uncertainty regarding the future of the world economy continued."
Although Alpine suffered from a shortage of parts due to the Japan and Thailand natural disasters, "we kept our production at stable levels and focused on selling high-value added products and developing new products meeting market needs," the company said.
In the company's audio products segment, consisting of aftermarket and OEM audio products, nine-month sales fell 21.2 percent to 40.4 billion yen ($527.8 million), and operating income fell 77 percent to 928 million yen ($12.1 million) from 4.02 billion yen. In the information and communications segment consisting of OEM display systems and OEM and aftermarket navigation, sales rose 9.3 percent to 105.1 billion yen ($1.37 billion) from 96.2 billion yen, and operating profits fell 26.5 percent to 6.83 billion yen ($89.2 million) from 9.29 billion yen.
In the audio segment, due to "increasingly intense price competition, sales in the European and the United States market of head units, chiefly CD players, were severe," the company said.
In OEM audio, sales fell because "mainstay customers decreased production due to the Great East Japan Earthquake and flooding in Thailand."
In the information and communications segment, competition in the Japan aftermarket "intensified with attempts by competitors to strengthen product lineups," but the company nonetheless "achieved strong sales due to the success of promotional campaigns."
Aftermarket segment sales were "positive" in the European and U.S. markets, "owing to positive customer response to the strong cost performance of our affordably priced navigation systems," the company said. Nonetheless, "sales decreased due to the aggressive marketing strategies of our competitors and deteriorating market conditions."
In OEM navigation and display sales, "production cutbacks among our major customers affected sales to automakers," Alpine said. However, sales of new models were strong to high-end European car manufacturers in North America and China, and "installation rates are recovering for such highly functional items as navigation and display products, pushing up sales."