Harman shares hit 14-month high after 1Q results

Harman shares hit 14-month high after 1Q results beat estimates; sales show sequential rise

• On 12:06 pm EDT, Friday October 30, 2009

NEW YORK (AP) -- Shares of Harman International Industries Inc. hit a 14-month high Friday a day after the company said its fiscal first-quarter sales rose from earlier this year and aggressive cost cuts continued.

RBC Capital Markets analyst Scott Ciccarelli upgraded the maker of audio and other products for automotive and consumer markets to "Outperform" from "Sector Perform" because of the cost cutting, new contracts and improvements in profitability.

On Thursday, Harman said it lost $9.5 million, compared to a $21 million profit in the same quarter last year. Sales were down 13 percent from a year ago -- but up 13 percent from the previous three months. Results beat Wall Street analysts' expectations.

The company's auto-related business has suffered as car sales plunged in the U.S. over the past year. But new contracts with Mercedes, BMW and Toyota could add "several hundred million" in annual revenue, Ciccarelli said. He boosted earnings estimates through fiscal 2011.

Meanwhile, R.W. Baird analyst David Leiker maintained his "Underperform" rating on the stock. Until Harman's customers recover, sometime next year, he said, the company's sales will remain under pressure. He did raise his price target to $24 from $16, however, due to the stronger-than-expected first quarter.

Harman shares rose $5.68, or 17 percent, to $38.68. The stock peaked at $40.33, its highest point since August 2008.

Buzz up!