Both JVCKENWOOD and Alps Alpine reported lower profits due in part to the higher cost of memory and other components.
JVCKENWOOD’s Mobility & Telematics sector, which includes car audio, saw close to a 15 percent increase in revenue in the recent 3 months ended June 30. Revenue hit $341 million (53,468 million yen). But core operating income dropped by over 62 percent down to $4 million.
JVCKENWOOD said revenue from its aftermarket business increased mainly due to new navigation systems for the Japanese market as well as higher prices implemented in response to higher memory and other component costs in the US, Japan and Europe.
Total corporate JVCKENWOOD revenue for all divisions rose to $566 million, up from $511 million a year ago. Core operating fell to $12.8 million from $19.5 million a year ago. Operating profits fell to $9.7 million, down from $27.8 million a year ago. Net profit declined to $11.6 million compared to $32.1 million a year ago.
JVCKENWOOD attributed the decline in profits to the “surge in memory prices beyond the levels anticipated at the beginning of the fiscal year, and the lingering impact of the US federal government shutdown on the Communications Systems Business…”
Alps Alpine
The Mobility sector of Alps Alpine, which includes Alpine car audio, saw an increase in revenue to $944 million, up from $838 million a year ago. But operating income saw a loss of $1.9 million compared to a loss of $319,000 a year ago.
Alps Alpine said the boost in revenue for the sector was due to increased OEM production and sales by its customers, particularly in North America. On the decline in profits Alps Alpine said, “although we continued to scale back unprofitable products, profits were dragged down by an increase in variable costs resulting from factors such as the sharp rise in memory prices.”
It said, “rising material costs are occurring not only for raw metals and memory but also for other items such as printed circuit boards…”
Alps Alpine expects better results in the second half as it negotiates new prices with OEM customers to cover the increase in memory costs.
Alps Alpine total corporate revenues were nearly flat with last year at $1.51 million compared to $1.52 a year ago. Operating income swung to a loss of $5.7 million compared to a profit of $23.6 million a year ago. Ordinary income fell to $638,000 compared to $7.7 million a year ago. Net loss widened to $22.3 million, compared to a loss of $17.9 million a year ago.
