Pioneer Posts Flat Sales, Lower Net Income

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Tokyo - Pioneer reported relatively flat sales, lower net income but higher operating income for its fiscal second quarter, ended Sept. 30.

Consolidated net sales declined 1.1 percent to 115,602 million yen compared with last year's second quarter. Although car navigation systems showed strong sales in Japan, the Japanese yen's appreciation against the U.S. dollar, combined with lower sales of optical-disc-drive-related products and a decline in car audio sales, mainly at the OEM business as a result of the Japan earthquake and tsunami, resulted in an overall decline, Pioneer said.

Net income declined 82.8 percent to 1,212 million yen compared with the prior year's second quarter. During the quarter, the average value of the Japanese yen appreciated 10.3 percent against the U.S. dollar, and was almost unchanged against the euro, compared with the second quarter of fiscal 2011.

There was a 17.4 percent increase in operating income from the second quarter of fiscal 2011, to 5,050 million yen, thanks to reductions in selling, general and administrative (SG&A) expenses, the company said.

By category, in car electronics sales increased 10.8 percent year on year, to 70,805 million yen, despite the negative impact of the Japanese yen's appreciation. In-car navigation systems, consumer-market sales rose, due to very strong sales in Japan. OEM sales grew as well, because of an increase in dealer option sales in Japan, the company said.

In car audio products, consumer market sales declined overall despite an increase in Europe. This drop in sales reflected a decline in Central and South America due to a delay in the introduction of new models as a result of the earthquake. OEM sales also declined, on lower sales in China and North America, from lower OEM orders owing to the earthquake, Pioneer reported.

OEM sales accounted for 42 percent of total car electronics sales, compared with 45 percent in the second quarter of fiscal 2011.

Operating income in this segment declined 1.9 percent due to an increase in SG&A expenses, combined with the effects of the earthquake, while gross profit rose, in line with an increase in sales, to 3,613 million yen.

Home electronics sales declined 17.5 percent year on year, to 33,520 million yen. Although sales of A/V systems rose, the decline reflected a drop in sales of optical-disc-drive-related products, Pioneer said.

This drop was the result of a decrease in sales of these products for PCs, in addition to the slowing down of the special demand for these products for A/V equipment associated with the shift to digital terrestrial broadcasting in Japan in July 2011, the company said.

Operating income in this segment grew 2.3 times compared with the second quarter of fiscal 2011, to 1,619 million yen, as reductions in SG&A expenses more than offset the decline in sales.

In the others segment, sales declined 8.2 percent year on year, to 11,277 million yen, mainly from lower sales of electronic devices and parts and of speaker units for cellular phones, which more than offset higher sales of factory automation systems. Pioneer said operating income declined 83.1 percent, to 143 million yen, owing to lower sales and a weaker gross profit margin, despite a reduction in SG&A expenses.


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