Friday’s Consumer Pops and Drops: FL, CPB, AVY, PF, and HAR
Harman International Industries (HAR) has a market cap of $5.4 billion. It rose by 4.8% to close at $75.15 per share on May 20, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 3.0%, -11.9%, and -19.5%, respectively, on the same day. This means that HAR is trading 2.1% below its 20-day moving average, 7.4% below its 50-day moving average, and 16.5% below its 200-day moving average.
Related ETFs and peers
The Guggenheim Raymond James SB-1 Equity ETF (RYJ) invests 0.71% of its holdings in HAR. The ETF tracks an equal-weighted index of US-listed stocks that analysts expect to achieve 15% total returns and outperform the S&P 500 over the next six to 12 months. The YTD price movement of RYJ was -0.49% as of May 20, 2016.
The iShares Morningstar Mid-Cap Growth Index Fund (JKH) invests 0.50% of its holdings in HAR. The ETF tracks a market-cap-weighted index of mid-cap companies selected by Morningstar based on their growth characteristics.
The market caps of HAR’s competitors are as follows:
- Delphi Automotive (DLPH): $18.6 billion
- Lear (LEA): $8.5 billion
Harman partnership with Google
Harman International Industries and Google have announced a new audio partnership at Google I/O 2016. This collaboration includes modules for Google’s new modular mobile device, Ara. This device will provide more features and the highest quality audio from a Harman-designed module to the customers.
Harman and Google’s Advanced Technology and Projects Group (or ATAP) are also working on the project Soli, which uses radar to enable new types of touchless interactions.
Performance of Harman International in fiscal 3Q16
Harman International (HAR) reported fiscal 3Q16 net sales of $1,628.1 million, a rise of 11.2% compared to net sales of $1,464.2 million in fiscal 3Q15. Sales of the Connected Car, Lifestyle Audio, and Connected Services segments rose by 5.1%, 11.6%, and 147.8%, respectively. Sales of the Professional Solutions segment fell by 4.1% in fiscal 3Q16 compared to fiscal 3Q15. It reported net foreign exchange of -$3.6 million in fiscal 3Q16 compared to $3.4 million in fiscal 3Q15.
Its net income and EPS (earnings per share) rose to $88.8 million and $1.22, respectively, in fiscal 3Q16, compared to $70.3 million and $0.99, respectively, in fiscal 3Q15.
Harman’s cash and cash equivalents fell by 44.5%, and its inventories rose by 21.1% in fiscal 3Q16 compared to fiscal 4Q15. Its current ratio rose to 1.7x and its debt-to-equity ratio fell to 1.3x in fiscal 3Q16, compared to a current ratio and a debt-to-equity ratio of 1.4x and 1.5x, respectively, in fiscal 4Q15.
The company has declared a quarterly cash dividend of $0.35 per share on its common stock. The dividend will be paid on May 23, 2016, to shareholders of record at the close of business on May 9, 2016.
The company has updated its projections for fiscal 2016:
- revenue of ~$6.8 billion
- operational EPS of ~$6.20
The reduction in the revenue and EPS is due to the weakness in the Professional Solutions division and supply constraints as a result of the earthquakes in Japan.
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