Harman's Stock Plunges by Double Digits Despite 12% Quarterly Revenue Bump
Harman is “exposed to some customer concentration risks,” said investment research company Zacks in a blog post Thursday after release of the company’s Q2 fiscal 2016 results. Harman’s quarterly revenue was up 12 percent year over year to $1.8 billion,…
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
but the company’s stock price plummeted during the day to a 52-week low of $66.38 before closing down Thursday 13 percent at $69.01. Harman’s top four customers generate half of its revenue, said Zacks. The post cited Audi/Volkswagen, BMW, Fiat Chrysler, Honda, Jaguar Land Rover and Toyota/Lexus as “significant” revenue sources for Harman, while noting the company recently linked with Alphabet’s Google and Microsoft on IoT partnerships. Harman is likely to benefit from growing automotive production globally especially as production of autonomous vehicles begins, said Zacks. Harman’s cloud platform and scalable technology are “gaining popularity” with the increase in connected cars and will help drive revenue, said Zacks, and the company continues to expand on the back of its strategic partnerships. It said. Harman’s new manufacturing capacities, “growing product pipeline, solid patent portfolio, new awards as well as product launches are expected to boost the top line and profitability in fiscal 2016." Harman secured $2 billion in new automotive contracts in the quarter from Subaru and Hyundai, said CEO Dinesh Paliwal on a Thursday earnings call. Sales in the connected car division increased 2 percent to $737 million from the year-ago quarter, while professional solutions fell 7 percent to $249 million, the company said. Lifestyle audio sales jumped 20 percent to $625 million. Earlier this week Harman opened a 188,000-square-foot North American automotive headquarters in Novi, Michigan. The facility's 1,000 employees will develop advanced technology solutions for the connected car and autonomous driving, said the company.