Harman Falls on Disappointing Earnings

The company also warned that it expects operating profit at its automotive business to worsen in fiscal 2009 compared with fiscal 2008.

In heavy afternoon trading, Harman shares dropped $5.91, or 13 percent, to $39.82, after falling as low as $39.25 earlier in the day. Over the past 52 weeks, Harman shares have traded between $35.74 and $124.13.

Harman said late Tuesday that for the quarter ended Dec. 31, it posted a profit of $43 million, or 68 cents per share, down from $81 million, or $1.22 per share, for the same quarter in 2006.

Excluding charges related to the terminated acquisition of the company, Harman posted an adjusted profit of 73 cents per share for the recent quarter.

Sales rose to $1.07 billion from $932 billion in the year-ago period.

Analysts polled by Thomson Financial expected a profit of 83 cents per share excluding the acquisition-related charges.

Christopher J. Ceraso of Credit Suisse cut his rating for Harman to "Neutral" from "Outperform" and his price target by $17 to $40, saying that although the company's restructuring plans should ultimately boost its profitability, it will be six months to a year before improvements appear.