Image source: Harman International Industries.

What: Shares of Harman International Industries (HAR) slumped on Thursday following the company's fiscal third-quarter earnings report. Harman missed analyst estimates on all fronts, sending shares down as much as 14.4%. The stock had regained some ground by noon, down about 9% at that time.

So what: Harman reported quarterly revenue of $1.63 billion, up 11% year over year but about $50 million below the average analyst estimate. Connected car sales rose 5% year over year, while lifestyle audio sales rose 11%, due in part to the acquisition of Bang & Olufsen Automotive. Professional solutions sales declined by 4% due to lower demand in Brazil and Europe, and connected services sales more than doubled due to the acquisition of Symphony Teleca.

Harman reported non-GAAP EPS of $1.36, up from $1.22 in the prior-year period but $0.07 shy of analyst expectations. On a GAAP basis, EPS was $1.22, with the discrepancy due to restructuring charges and acquisition-related items.

In addition to missing analyst estimates, Harman lowered its outlook for fiscal 2016. The company now expects revenue of $6.825 billion and non-GAAP EPS of $6.20. This compares to previous guidance calling for $7 billion of revenue and non-GAAP EPS of $6.50. Harman blamed weakness in the professional services division, as well as supply constraints related to the recent earthquakes in Japan, for the guidance cut.

Now what: With Harman coming up short of analyst estimates on all fronts and slashing its guidance, it's no surprise that investors punished the stock. On an absolute basis, the company's results were fine, with revenue and earnings growing, but Harman couldn't match investors' expectations.

Harman CEO Dinesh Paliwal pointed its strong performance and promised to fix the problems in the professional services division. "For the 12th consecutive quarter, HARMAN has delivered top and bottom line growth, and in the quarter, we grew EBITDA 26 percent year-over-year. Our Connected Car and Lifestyle Audio divisions, which represent approximately 75 percent of our revenue, continue to deliver strong results. In our Professional Solutions division, we are taking decisive actions to improve performance and better position HARMAN for growth."