Looks like I got this slam dunk: Gross profit increased 29.4% year over year to $289.3 million. Gross margin increased 80 basis points (bps) to 27.5% in the quarter. The increase was driven by strong growth in the Infotainment division arising from higher demand and sales price increase, which was more than enough to offset higher neodymium costs.
Gross margin for the Infotainment division increased 500 bps to 23.9% in the reported quarter. However, the same for Consumer division and Professional division decreased 420 bps and 230 bps, respectively, in the reported quarter.
Selling, general and administrative (SG&A) expense increased 17.6% year over year to $214.0 million in the first quarter. However, SG&A as a percentage of revenue declined 130 bps to 20.4% in the reported quarter driven by productivity improvement across the company’s cost base.
Operating income was up 91.5% year over year to $76.2 million. Operating margin expanded 250 bps to 7.3% based on a higher gross profit base and lower SG&A expense. Net income was $49.8 million, up 97.6% year over year from $25.2 million reported in the prior-year quarter.
Revenues increased 25.5% year over year to $1.05 billion in the first quarter of 2012. The strong year-over-year growth was driven by double-digit revenue growth in the Infotainment and Lifestyle divisions.
Infotainment revenue increased 35.2% to $603.0 million. The Lifestyle division earned revenues of $300.0 million, up 19.5% year over year. The Professional division witnessed a year-over-year growth of 5.7% to reach $148.0 million in the first quarter.
Infotainment awarded business backlog amounted to $11.4 billion, while scalable platform revenue came in at $4.6 billion. Automotive awarded backlog was $3.1 billion. Sales from the BRIC countries shot up 91% year over year in the reported quarter.
As of September 30, 2011, cash and cash equivalents were $398.4 million compared with $603.9 million as of June 30, 2011. Liquidity was $1.2 billion, including a $543.0 million credit facility.
Harman expects robust operating margin growth going forward (2013-2014), based on the strong performance of infotainment business. Harman expects to outperform the overall automotive sector going forward given the increasing adoption rate in emerging markets of Brazil, Russia, India and China. BACKLOG OF 11.4 Billion!!! Stock is going to at least $60.00 ($4.00 x 15times-60).