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Harman Posts Q1 Sales Gain, Net-Income Decline

Stamford, Conn. – Harman International started off its 2014 fiscal year with double-digit sales gains in all three of its operating divisions, but consolidated net income fell 15 percent from the year-ago period to $46 million.

Consolidated sales rose 17 percent (including currency changes) to $1.17 billion, with operating income falling 12 percent to $69 million in the quarter, which ended Sept. 30.

“Net sales increased due to the expansion of recent production launches in the [OEM] infotainment division, growth in home and multimedia and [OEM] car audio within the lifestyle division, and the expansion of the company’s product portfolio into lighting within the professional division,” the company said.

Within the lifestyle division, the company didn’t break out OEM autosound sales from consumer electronics sales, but division sales as a whole rose 15 percent (including currency changes) to $334 million, and operating income rose 11 percent to $41 million. In a conference call, chairman Dinesh Paliwal said home and multimedia sales were up globally by 24 percent in the quarter, and he said he expects “another stellar quarter” in the second quarter. OEM autosound makes up the vast majority of the lifestyle division’s sales.

In the OEM infotainment division, sales rose 14 percent (including currency changes) to $640 million, but operating income fell 27 percent to $32 million.

In the pro division, sales rose 37 percent to $197 million, and operating income gained 34 percent to $26 million.

First-quarter results include non-recurring restructuring charges of $24 million. In the second quarter, the company is implementing a new restructuring program in Germany to deliver annual savings of about $25 million beginning in fiscal 2015, the company said.