Pioneer, Kenwood Report Sales

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Kenwood Pioneer financial results

Pioneer Corporation reported its car electronics sales fell 13.5 percent for the recent quarter to $687 million (78.2 billion yen), compared to last year “due to a decrease in sales of OEM business and the negative effects of the Japanese yen’s appreciation.”

The yen increased by 11.2 percent against the dollar over the same period last year to 109 yen to the dollar.

US VP Marketing Ted Cardenas explained that Pioneer Electronics USA buys its goods from Pioneer in Japan so if the yen has more value the cost of those radios are higher to Pioneer.  The same is true for other Japanese companies.  If they don’t raise  prices then margins are lower and these lower margins may be passed on to dealers, who then have less incentive to push those products.

Pioneer Corporation also said of its consumer products sales during the quarter ended December 31, 2016,  “Sales of car audio products fell mainly because of a decrease in North America and Europe, owing to a stronger yen, despite higher sales in Central and South America.”

OEM sales as a percentage of total car electronics sales fell to 57 percent compared to 61 percent a year ago.

Pioneer’s total net sales for the quarter dropped almost 16 percent to $864 million (98.4 billion yen) compared to $1.03 billion for the quarter a year ago.

Pioneer’s earnings swung to a loss of $35 million compared to a positive gain of $2.2 million for the quarter a year ago. Pioneer said this was due to a restructuring cost, the rise of the yen and a loss from the transfer of the cable TV system-related equipment business, each of which was recorded as an extraordinary loss, despite an increase in operating income.

For the full 9 months ended December 31, 2016, Pioneer’s sales were $2.5 billion, down 15 percent.  It also widened its loss in earnings for the 9 months to negative $27 million from negative $15 million a year ago.  Pioneer is still forecasting earnings of $8.8 million for the full year ending in March.  Although it revised downwards its full year forecast for net sales by 2.5 percent to $3.4 billion.

Kenwood’s net sales increased for the quarter as did its operating income.

Kenwood’s total net sales for the quarter rose to $697 million (79.4 billion yen), up from $660 million a year ago.  Car electronics sales also rose to $335.3 million, up from $319 million a year ago.  OEM sales increased during the quarter, but the company recorded a loss in sales of its i-ADAS (Advanced Driver Assistance Systems).

For the first 9 months of the year ended December 31, 2016, Kenwood reported a sales increase of 0.6 percent to $1.94 billion (215.8 billion yen), up from $1.88 billion a year ago. Net income continued to decline for the 9 months to a loss of $93.9 million, compared to a loss of $48.2 million due in part to “extraordinary losses.”

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6 Comments

  1. That’s a lot of boxes being moved there. Someone is installing those boxes. How profitable is that transaction? Vote with your wallet and do not reward bad behavior.

  2. It’s the same story from these companies all the time yet they choose to do nothing about it. At this point I don’t believe they can fix the problem. In order to fix it they would need to put a massive effort into reducing online sales and just imagine how costly that would be for these companies. Their distribution networks are out of control and at this point I can’t imagine they could handle shutting down that cash flow in order to get the sales back into their actual dealers. I was involved in a forum discussion with dealers across the country recently that admitted they sell some head unit lines at their cost in hopes of landing the deal and making as much profit as possible off the labor and install accessories. I’ve also talked to a couple dealers that don’t even stock head units because “it’s just not worth it” and they have transitioned over to more OEM integration.

  3. If they company want to stay in the black
    Stop pushing the product on the net raise the map priceing and let the dealer make some money no dealer wants to push a line that has no Margans I see more and more factory’s sales direct to the customer now on the net why even have dealers. The race to zero is almost here
    Treat your branding and profit will go up

  4. “and these lower margins may be passed on to dealers, who then have less incentive to push those products.” – Pioneer guy.
    I wonder if he’s looked at the margins their product offers anytime lately? Because if it were any lower I would hand customers money to take the product.

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