Audio systems maker Harman International Industries Inc. (HAR), Monday reported a higher second-quarter profit that easily trumped analysts expectations. Earnings for the quarter were driven mainly by surging sales in BRIC countries, especially China. Following the news, Harman shares rose over 5 percent on the New York Stock Exchange.
Stamford, Connecticut-based Harman's profit for the quarter improved to $59.3 million or $0.82 per share from $53.1 million or $0.74 per share last year.
On an adjusted basis, net income rose to $59.8 million or $0.83 per share from $56.3 million or $0.79 per share last year. On average, four analysts polled by Thomson Reuters expected earnings of $0.73 per share for the quarter. Analysts' estimates typically exclude one-time items.
Harman, whose products competes with those from Bose, Yamaha, Panasonic and Sony, said its net sales for the quarter grew 18 percent to $1.13 billion, topping analysts' estimate of $1.05 billion. The company said all three of its divisions reported higher sales and operating margins during the quarter.
Sales from BRIC -- Brazil, Russia, India and China -- increased 32 percent for the quarter, especially China where sales jumped 44 percent from last year.
Sales from infotainment unit increased 20 percent to $600 million, while Lifestyle division sales also improved 20 percent to $369 million from last year. Sales growth at both these units were driven by robust demand in the luxury automotive segment and continued growth in BRIC countries.
Meanwhile, sales at professional division rose 8 percent to $158 million from last year.
Gross margins, the percentage of sales left after deducting sales costs, dropped to 27.1 percent from 28.1 percent, due mostly to the cost increase of rare earth neodymium magnets used in some of the company's products. Meanwhile, Harman leveraged its SG&A and other expenses as a percentage of sales by 2.1 percentage points to 18.6 percent.
Harman also declared a dividend of $0.075 per share, payable on March 5 to shareholder as of February 17.
HAR is currently trading at $46.97, up $2.46 or 5.53%, on a volume of 1.3 million shares.
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