Harman International Industries Crushes Earnings Estimates

Harman International Industries (NYSE: HAR  ) reported earnings on May 2. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q3), Harman International Industries met expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted. Non-GAAP earnings per share grew. GAAP earnings per share shrank significantly.

Margins dropped across the board.

Revenue details
Harman International Industries reported revenue of $1.06 billion. The six analysts polled by S&P Capital IQ predicted revenue of $1.06 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.79. The nine earnings estimates compiled by S&P Capital IQ predicted $0.61 per share. Non-GAAP EPS of $0.79 for Q3 were 6.8% higher than the prior-year quarter's $0.74 per share. GAAP EPS of $0.50 for Q3 were 79% lower than the prior-year quarter's $2.38 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 25.4%, 140 basis points worse than the prior-year quarter. Operating margin was 3.6%, 250 basis points worse than the prior-year quarter. Net margin was 3.3%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $1.12 billion. On the bottom line, the average EPS estimate is $0.84.

Next year's average estimate for revenue is $4.24 billion. The average EPS estimate is $3.00.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 168 members out of 184 rating the stock outperform, and 16 members rating it underperform. Among 47 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 45 give Harman International Industries a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Harman International Industries is hold, with an average price target of $51.43.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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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