Harman International Industries Inc. (HAR), a developer of audio products and electronic systems, released its new JBL OnBeat loudspeaker docking station.
The speaker system is compatible with Apple Inc. (AAPL) devices such as iPhone, iPod, iPad and also iPad 2. From April, the black JBL OnBeat loudspeaker dock will be available exclusively at Apple and Best Buy Co. Inc. (BBY) stores for $149.95.
Using a universal connector, the JBL OnBeat can dock the iPad or iPad 2 in portrait mode only. However, iPhones and iPods can be rotated into landscape mode, which is preferable for watching videos.
JBL Onbeat comes with an optional composite cable, which can be used to display videos on a high definition television (HDTV).
JBL OnBeat features an infrared remote (IR) that makes iPhone and iPad menu navigation possible across the room (up to 15 feet).
The system also features a USB port that can be used to charge devices, when connected to the iTunes music library. The JBL OnBeat has an auxiliary input (3.5 mm stereo), which enables audio playing from any device with a headphone jack.
Harman has a strong consumer base that spans automotive, consumer and professional markets. We believe the new JBL OnBeat will likely drive sales growth in the consumer division going forward.
The company achieved strong sales growth in the second quarter of 2011, with revenues of $956.1 million, up 3.0% year over year. The strong year-over-year growth was driven by increased penetration in the Asian and Latin American markets, further supported by the Selenium acquisition in Brazil, which was completed in the latter half of 2010.
Harman won several important contracts from Toyota Motor Corp. (TM), Chrysler and Fiat that increased its backlog to $13.0 billion at the end of the fiscal second quarter.
During the second quarter, the Automotive segment saw a significant deal win from the Volkswagen Group worth $1.2 billion. During the quarter, Harman also formed a partnership with Sierra Wireless that will provide fourth-generation (4G)/LTE connectivity to automobiles.
Recommendation
We have an Outperform rating on Harman over the long term (6-12 months). Harman remains focused on achieving profitable growth, both organic and inorganic, over the long term. Harman remains optimistic on a long-term basis due to the increased demand for its products, mainly in the emerging markets of Brazil, China, Russia and India.
Moreover, strong growth from a recovering automobile and consumer sector and Harman’s record amount of backlog will fuel growth, in our view.
Currently, Harman has a Zacks #1 Rank, which implies a Strong Buy rating on a short-term basis (1-3 months).
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