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What:Shares of Harman International Industries fell as much as 15% early Thursday, but partially recovered to trade down around 4.9% as of 12:30 p.m. after the audio and infotainment equipment company announced weaker-than-expected fiscal-third-quarter 2015 results.
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So what:Quarterly net sales climbed 4% year over year to $1.46 billion, which translated to 9% growth in adjusted net income to $1.22 per diluted share. Analysts, on average, were expecting adjusted earnings of $1.27 per share on slightly higher revenue of $1.48 billion.
To be fair, note Harman -- like so many other global businesses of late -- suffered from foreign currency headwinds as well. Excluding currency changes, revenue and adjusted net income per diluted share would have climbed 14% and 15%, respectively.
"We delivered another solid quarter of growth," said Harman CEO Dinesh Paliwal, " particularly in our automotive businesses, despite unprecedented foreign exchange headwinds."
Now what:Paliwal also noted Harman recently completed the acquisitions of Symphony Teleca and Redbend, which should give the company "immediate scale in software services and better position Harman to capitalize on the rapid growth of the Internet of Things."
Nonetheless, while Harman continues to expect full-year 2015 revenue of roughly $6 billion, it also reduced its earnings guidance for the year by $0.20 per share to roughly $5.65 per share. For that, Harman blamed a combination of weakness in certain geographies for its professional business and continued currency headwinds. Harman's guidance also includes around $100 million in revenue in the current quarter from the aforementioned acquisitions, which will not contribute to earnings in the near term due to financing costs and Harman's resulting increased share count.
In the end, this certainly wasn't aterriblequarter for Harman, which explains why the stock has gradually clawed back so far from its more severe early morning losses. But it's also hard to blame the market for taking a step back today given Harman's continued expectations of near-term weakness. For now, and though I'm encouraged by its move to capitalize on the IoT market, I'm content to watch Harman's progress from the sidelines.
The article Why Harman International Industries Inc. Stock Hit a Sour Note Today originally appeared on Fool.com.
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