Harman International Industries Inc. HAR reported weaker-than-expected third quarter fiscal 2016 results wherein non-GAAP earnings per share came of $1.36 and revenues of $1.628 billion missed the respective Zacks Consensus Estimate of $1.44 and $1.698 billion. Harman International Industries Inc. (HAR) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany On a year-over-year basis, both the metrics grew 11%. Moreover, excluding the foreign currency translation effect; revenues grew 12% year over year.On a non-GAAP basis, gross margin grew 160 basis points (bps) to 30.4% while operating margin, too increased 130 bps to 9.1%. Non GAAP EBITDA margin was up 140 bps to 11.6%.The company modestly tweaked its fiscal 2016 outlook due to weakness in the Professional Solutions segment and the recent earthquake in Japan. The company now expects full year earnings per share and revenues to be $6.20 and $6.825 billion, respectively as against $6.50 and $7 billion projected earlier (Aug 2015)Segment DetailsConnected Car segment revenues grew 5% year over year to $767 million, driven by higher take rates. On a non GAAP basis, gross margin at the segment improved 370 bps to 26.4% while operating margin grew 260 bps to 12.8%.Lifestyle Audio revenues increased 11% year over year to $473 million led by higher take rates in car audio and the Bang & Olufsen acquisition. On a non-GAAP basis, gross margin at the segment improved 370 bps to 35.5% while operating margin increased 120 bps to 13.5%.Professional division revenues decreased 4% from the year-ago quarter to $232 million mainly due to falling demand in some European countries and Brazil. On a non GAAP basis, gross margin at the segment fell 780 bps to 33.7%. Non GAAP operating margin came down to 3.1% from 9% in the prior year quarter. Revenues at the company’s Connected Services division were $166 million, up 147% year over year. On a non GAAP basis, gross margin at the segment declined 200 bps to 28.7% while operating margin came down to 100 bps to 8.4%Balance SheetAs of Mar 31, 2016, cash and cash equivalents were $360.4 million compared with $649.5 million as on Jun 30, 2015.Our TakeGiven the ongoing volatility in the U.S. auto market, some growth issues persist for the company. This is because Harman is exposed to some serious customer concentration risks with its top five customers accounting for approximately half of its revenues and around 75% of its auto-related revenues.Nonetheless, Harman is one of the leading providers in the car infotainment space. Apart from audio equipment, Harman’s cloud platform and scalable technology are gaining popularity with a rise in the number of connected cars. In Feb 2016, Harman collaborated with InterDigital IDCC to develop a range of cutting-edge IoT services.In addition, Harman’s new manufacturing capacities, solid patent portfolio, new awards as well as product launches are expected to boost the top line and profitability.Its collaborations with auto-makers BMW, Fiat Chrysler Automobiles N.V., Audi/Volkswagen, Honda Jaguar Land Rover and Toyota/Lexus are significant revenue sources. Furthermore, the company has also partnered with Alphabet’s GOOGL Google and Microsoft MSFT to enhance its offerings.Currently, Harman carries a Zacks Rank #4 (Sell). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report INTERDIGITL INC (IDCC): Free Stock Analysis Report HARMAN INTL IND (HAR): Free Stock Analysis Report MICROSOFT CORP (MSFT): Free Stock Analysis Report ALPHABET INC-A (GOOGL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research