Harman Pares Back First-Quarter Profit Outlook
From the Associated Press
Audio equipment maker Harman International Industries said today its first-quarter profit would fall well below analysts' expectations due to higher research and development costs.
The company said it expects first quarter earnings per share of 50 cents, before factoring in any costs associated with Harman's deal to sell itself to private equity groups. The prospective acquirers -- Kohlberg Kravis Roberts & and Goldman Sachs Group -- said Friday they were abandoning the agreement.
Analysts polled by Thomson Financial had expected earnings of $1.02 per share for the quarter. Analyst estimates typically exclude one-time charges and gains.
The company said its expects sales of $950 million for the quarter. Analysts had expected revenue of $934.4 million.
Harman said its profit was affected by higher research and development costs.
For the full 2008 fiscal year, the company said its earnings per share, before one-time costs, will equal or exceed its 2007 results. The company earned $4.14 per share in its last fiscal year.
Analysts predict earnings of $4.87 per share for the year on revenue of $4.07 billion. Harman said it expects revenue of $4.1 billion for the year, up from $3.55 billion in 2007.
Harman said it decided to offer guidance to remind investors that it remains "sound" after the stock plunged 24 percent Friday. KKR and GS Capital Partners said Friday they are under no obligation to complete their proposed buyout of Harman because "a material adverse change" in Harman's business had occurred. Harman said it disagreed with that assessment.
The private-equity firms had agreed to pay $120 per share in cash for Harman and the company's board had approved the deal, which was scheduled to close at the end of the year.
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