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Harman International’s Revenue and Income Rose in Fiscal 2Q16

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Price movement of Harman International Industries

Harman International Industries (HAR) fell by 4.8% to close at $74.39 per share at the end of the last week of January 2016. The stock’s price movements on a weekly, monthly, and YTD basis are -4.8%, -21.8%, and -21.0%, respectively.

Technically, the stock has broken its support and is trading below all of its moving averages. Currently, HAR is trading 11.0% below its 20-day moving average, 18.9% below its 50-day moving average, and 30.8% below its 200-day moving average.

The Guggenheim S&P Equal Weight Consumer Discretionary ETF (RCD) invests 1.1% of its holdings in HAR. The ETF tracks an equal-weighted index of large-cap US consumer discretionary stocks drawn from the S&P 500. The YTD price movement of RCD is -7.0% as of January 28, 2016.

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 15% total returns and to outperform the S&P 500 over the next 6–12 months.

The competitors of Harman International Industries and their market capitalizations are as follows:

  • Apple (AAPL)— $539.7 billion
  • Sony (SNE) — $26.8 billion
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Performance of Harman International Industries in fiscal 2Q16

Harman International Industries reported fiscal 2Q16 net sales of $1,772.2 million, a rise of 11.9% compared to net sales of $1,583.5 million in fiscal 2Q15. Sales of the company’s connected car and lifestyle audio segments rose by 2.1% and 20.4%, respectively, and sales of its professional solutions segment fell by 6.7% in fiscal 2Q16.

Harman’s cost of sales as a percentage of net sales and its gross profit rose by 1.5% and 10.5%, respectively, in fiscal 2Q16 compared to fiscal 2Q15. Its non-GAAP (generally accepted accounting principles) net income and non-GAAP earnings per share rose to $134.2 million and $1.84, respectively, in fiscal 2Q16, compared to $126.0 million and $1.79, respectively, in fiscal 2Q15.

Meanwhile, its cash and cash equivalents fell by 32.6%, and its inventories rose by 26.2% in fiscal 2Q16 compared to fiscal 4Q15. Its current ratio rose to 1.43, and its debt-to-equity ratio fell to 1.36 in fiscal 2Q16 compared to its current and debt-to-equity ratios of 1.36 and 1.45, 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 February 23, 2016, to each shareholder on record as of the close of business on February 8, 2016.

The price-to-earnings and price-to-book value ratios of HAR are 15.3x and 2.3x, respectively, as of January 29, 2016.

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