Harman Turns Up the Volume on Marketing Efforts
Audio specialist Harman International Industries (NYS: HAR) , a historically quiet company when it comes to promoting its name, will launch a major advertising campaign this fall that stars Tim McGraw, Paul McCartney, Kanye West, and other worldwide entertainment icons who rely on the company's sound systems.
That announcement on Wednesday from CEO Dinesh Paliwal comes as Harman's fourth-quarter revenues jumped 21%, to $1.03 billion. Its automotive division, which sells audio products to cars manufactured by BMW, Audi, Toyota, Hyundai, and Jaguar, sped up 21% to $760 million, thanks to an overall increase in car production around the world.
The company's net income during the quarter fell to $18.9 million, or $0.26 per share, compared with $133.9 million, or $1.89 per share, a year earlier, which included income of $115.4 million from discontinued operations.
Harman, which competes with Panasonic (NYS: PC) and Sony (NYS: SNE) , saw sales jump 12%, to $3.8 billion, for the fiscal year. The company reported a profit of $135.9 million for the year, or $1.90 per share, down from $158.8 million, or $2.25 per share, in fiscal 2010.
The earthquake and tsunami that struck Japan in March directly affected operating income, thanks to a sales drop in higher-margin branded cars to Japanese customers. Paliwal says another "hiccup" during the quarter was related to Japan's tightened electronic-component supply.
The company separately announced plans to reorganize its automotive and consumer divisions and create two new ones -- infotainment and lifestyle -- to boost profitability. The new divisions, which won't affect the company's 12,000-employee base or manufacturing facilities, will bring the office and car audio and technology segments under one umbrella.
"A lot of consumers today are tech-savvy and are looking for everything portable, seamless and easy to operate," Paliwal said. "They want audio systems with no wires hanging out."
The company plans to kick off a new integrated marketing campaign in late September or early October that features performers who have relied on its popular audio brands, including AKG and JBL, while performing at the Grammys and venues such as the Lincoln Center and Kennedy Center. Some celebs are already signed on, and others are wrapping up their deals.
"Some of the artists we picked have used our speakers and microphones for 30 to 40 years," Paliwal said. "They have something solid to talk about how they used it and helped design some products."
If none of this gives you the itch to buy, it may still be worthwhile to keep an eye on Harman, Sony, or Panasonic. You can add any of these stocks to your Foolish watchlist by clicking on the "+" icons in this story. Don't have a watchlist yet? Set one up today for free.
At the time this article was published Fool contributor Tierney Plumb holds no positions in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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