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Yesterday’s Consumer Pops and Drops: GM, SNE, MDLZ, and NWL

PART:
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Part 10
Yesterday’s Consumer Pops and Drops: GM, SNE, MDLZ, and NWL PART 10 OF 14

Harman International Announces New Plan with Brightstar

Price movement

Harman International (HAR) has a market cap of $6.1 billion. It fell by 0.47% to close at $85.59 per share on September 6, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 0.33%, -1.1%, and -7.9%, respectively, on the same day. HAR is trading 0.27% above its 20-day moving average, 6.6% above its 50-day moving average, and 5.1% above its 200-day moving average.

Harman International Announces New Plan with Brightstar

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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 expected by analysts to achieve a 15% total return and outperform the S&P 500 over the next six to 12 months. The YTD price movement of RYJ was 11.9% on September 6.

The iShares Morningstar Mid Core ETF (JKH) invests 0.32% of its holdings in HAR. The ETF tracks a market-cap-weighted index of US mid-cap companies that exhibit both growth and value characteristics as determined by multifactor selection.

The market caps of HAR’s competitors are as follows:

  • Delphi Automotive (DLPH) — $19.3 billion
  • Lear (LEA) — $8.6 billion

Latest news on Harman

In a press release on September 6, 2016, Harman reported “that it will expand its partnership with Brightstar Corp., the world’s leading mobile services company for managing devices and accessories across the wireless ecosystem, and the largest specialized wireless distributor in the industry. Through the collaboration, HARMAN will deliver best-in-class wireless audio solutions to Brightstar’s expansive network of mobile device manufacturers, operators and retailers.”

It added that “following a successful three-year collaboration, including the distribution of JBL and Harman Kardon products to mobile operators & retailers worldwide, HARMAN will continue to work with Brightstar to launch the new JBL Duet headphones and Harman Kardon Onyx Mini wireless speaker, which will both be available via Brightstar channels in fall 2016.”

Performance of Harman International in fiscals 4Q16 and 2016

Harman International reported fiscal 4Q16 net sales of $1.9 billion, a rise of 11.8% from the net sales of $1.7 billion in fiscal 4Q15. Sales of the connected car, professional solutions, lifestyle audio, and connected services segments rose by 11.2%, 0.35%, 24.8%, and 6.9%, respectively, between fiscals 4Q15 and 4Q16. The company’s gross profit margin and operating income rose by 3.2% and 35.8%, respectively.

Its net income fell to $72.9 million in fiscal 4Q16, compared with $73.2 million in fiscal 4Q15. It reported EPS (earnings per share) of $1.01 in fiscals 4Q15 and 4Q16. It reported adjusted EPS of $1.57 in fiscal 4Q16, a rise of 14.6% from fiscal 4Q15.

Fiscal 2016 results

In fiscal 2016, HAR reported net sales of $6.9 billion, a rise of 11.3% YoY (year-over-year). The company’s gross profit margin and operating income rose by 2.6% and 23.5%, respectively, in fiscal 2016.

Its net income and EPS (earnings per share) rose to $361.7 million and $4.99, respectively, in fiscal 2016, compared with $342.7 million and $4.84, respectively, in fiscal 2015. It reported adjusted EPS of $6.24 in fiscal 2016, a rise of 9.3% over fiscal 2015.

Harman’s cash and cash equivalents fell by 7.3% and its inventories rose by 1.8% in fiscal 2016. Its current ratio and debt-to-equity ratio rose to 1.6x and 1.47x, respectively, in fiscal 2016, compared with 1.4x and 1.45x, respectively, in fiscal 2015.

Projections

The company has made the following projections:

Fiscal 2017

  • sales in the range of $7.3 billion to $7.5 billion
  • operational EBITDA (earnings before interest, tax, depreciation, and amortization) in the range of $900 million to $940 million
  • operational EPS in the range of $6.75 to $7

Fiscal 2018

  • sales of ~$7.7 billion
  • operational EBITDA of ~12.7%

Fiscal 2019

  • sales of ~$8.6 billion
  • operational EBITDA of ~13.5%

In the next part of this series, we’ll discuss Johnson Controls (JCI).

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