Harman Shares Tumble on Reduced Forecast



Harman International Industries today slashed its earnings forecast for the current fiscal year, sending the District-based consumer electronics manufacturer's stock tumbling to its worst single-day performance in 21 years. Shares of Harman dropped $25.97, or 37.6 percent, to close at $43 in New York Stock Exchange trading.

The company said that falling prices for portable navigation devices -- which it markets under the Harman Kardon brand -- were the primary reason for its revised outlook for fiscal 2008. (See the company's statement.) The company said it now expects to earn between $3.00 and $3.10 a share, excluding costs of a buyout of the company that ultimately failed. A previous forecast had said that fiscal 2008 earnings would surpass the per-share profit of $4.14 it reported in 2007.

Primarily used for driving directions and outdoor recreation, global positioning system (GPS) devices proved to be a popular item in an otherwise lackluster year for the consumer technology industry. Sales of GPS devices jumped five-fold through November 2007 from the corresponding period a year ago, as manufacturers cut prices and retailers widened distribution.

"While the growth fundamentals of our core business remain sound, the difficult [portable navigation device] environment presents a challenge," said Dinesh Paliwal, Harman chief executive, in a statement. The company is scheduled next month to release financial results for its fiscal second quarter.

Harman International was founded in 1952 by Sidney Harman, an authority on workplace productivity and a prominent Washington-area philanthropist. The company sells high-end audio equipment JBL, Harman Kardon, Mark Levinson and Infinity brands.

Last spring, Sidney Harman negotiated an innovative deal to sell his company for $8 billion to Goldman Sachs and Kohlberg Kravis Roberts. But the transaction collapsed in September as credit markets soured and several other high-profile deals stalled. A month later, the buyers and sellers negotiated a settlement, with KKR and Goldman agreeing to provide $400 million in financing to Harman.
-- Mike Shepard

By Mike Shepard  |  January 14, 2008; 2:37 PM ET  | Category:  Manufacturing
Previous: Ashburn WiMax company scores $20 million in funding | Next: Early Briefing: Robert Johnson's New Hotel Fund

Comments

Please email us to report offensive comments.



The comments to this entry are closed.

 
 
RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company