Why Harman Shares Got Crushed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of audio-products maker Harman International (NYSE: HAR  ) were picking up static today, falling as much as 18% after missing earnings estimates and announcing job cuts.

So what: Harman, a heavy supplier to the auto industry, was another victim of the slowdown in Europe as adjusted earnings per share dropped to $0.59 a share, well below the $0.88 analysts expected. CEO Dinesh Paliwal said: "We expected European production to be lower, but the accelerated slowdown in the month of December really surprised us." As a solution, the parent of brands such as JBL said it would cut 500 jobs in high-cost countries such as Europe and North America, and move some of its manufacturing capacity to developing countries.

Now what: Harman also sharply cut back its 2013 EPS forecast to $2.70-$2.90 from $3.67-$3.92. As others in the industry have said, Harman expects a difficult first half of the year in Europe, but it expects conditions to begin improving in the second half of 2013. Several other industry peers have reported bad quarters, but the European market should eventually turn around. Harman appears to be taking savvy steps to improve profitability, and I'd expect the stock to bounce back later in the year if conditions in Europe improve.

Want more information on Harman? Add the company to your Watchlist by clicking right here

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2228641, ~/Articles/ArticleHandler.aspx, 8/29/2016 9:20:43 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 4 minutes ago Sponsored by:
DOW 18,502.99 107.59 0.58%
S&P 500 2,180.38 11.34 0.52%
NASD 5,232.33 13.41 0.26%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/29/2016 4:02 PM
HAR $85.31 Down -0.09 -0.11%
Harman Internation… CAPS Rating: ***