Harmon International (ticker: HAR), maker of JBL, Harmon/Kardon and Infinity stereo equipment and 'infotainment' automotive systems, reported a second straight quarter of impressive earnings. Key data points and excerpts from the conference call:
- Net income: $54 million or 79 cents/share ($33.7m in F1Q05)
- Revenue: $754.6 million ($691.7 in F1Q05) -- Sectors: Automotive $520.3, Consumer $111.4, Professional $123
- Gross margins: 35.3% (up from 32% in F1Q05)
- Guidance for FY06 net income: $3.85/share
In the conference call, Executive Chairman Sidney Harmon commented on the company's iPod product for automotive, and the growth of infotainment automotive systems:
Our automotive book, the order book going forward is strong, getting stronger. We have in hand 100% of the automotive OEM business required to satisfy our business plans for 2006 and 2007, and we are virtually there for 2008...
The early response to our newest offering in the automotive after-market segment of the consumer business, the Harman Kardon Drive+Play, has been very positive. Drive+Play provides full iPod control and interface, along with a highly visible display in the car. Music management, choice by album, genre or artist, and eventually to be controlled by voice, facilitates the easy transfer of the iPod from home to car and back. We’re now making first shipments against a substantial and growing backlog...
All of us recall, because it isn’t all that long ago, that there was a wonder in the industry and among us about the legs for infotainment systems. Was it a novelty? Was it limited to luxury applications? I think that’s gone. There isn’t an observer who doesn’t recognize that these have become fundamentally the central nervous systems of the cars, and that the application across all vehicles is broad name developing.
(Quotes are from the CCBN StreetEvents transcript.)