Panasonic Q1 results take a plunge
TOKYO: Japanese high-tech giant Panasonic Corp. announced Monday a big first-quarter loss, blaming weak sales of televisions, digital cameras and other electronic goods during the recession.
Japan's biggest supplier of home appliances is facing fierce competition from South Korean rivals Samsung and LG Electronics, which have benefited from a weaker won as Japanese exporters suffered due to a stronger yen.
Panasonic posted a net loss of 52.98 billion yen (560 million dollars) for the April-June quarter, swinging from a year-earlier profit of 73.03 billion yen. Revenue slumped 25.9 percent to 1.60 trillion yen.
It logged its first operating loss in eight years, totalling 20.18 billion yen, against a profit of 109.57 billion yen in the same period of 2008.
The group, which changed its corporate name from Matsushita Electric Industrial in October, is cutting 15,000 jobs and closing dozens of plants as it struggles to recover from its first annual loss in six years.
The maker of the Viera television said its flat screen division remained in the red in the first quarter as a slump in European demand failed to offset higher sales in North America and Japan, helped by economic stimulus measures.
Chief financial officer Makoto Uenoyama warned that uncertainties lingered as demand for electronic devices was likely to lose steam and the outlook for the European economies remained murky.
"Overall sales of flat screen televisions dropped due to the economic downturn in Europe... as well as weaker demand in Russia," Uenoyama said.
Despite the weak performance, however, the company is on track to sell 15.5 million flat-screen televisions worldwide in the current fiscal year to March 2010 as planned, he added.
Panasonic, which is buying its struggling smaller rival Sanyo, reduced its April-September net loss forecast to 100 billion yen from 195 billion.
But it left unchanged its forecast for a loss of 195 billion yen in the full business year to March 2010, warning that price competition was likely to intensify further.
It expects sales to drop 10 percent to 7.0 trillion yen but operating profit to rise of 2.9 percent to 75 billion yen.
The company is pinning much of its hope of a recovery on customers in emerging economies such as China.
Panasonic is not the only Japanese electronics giant in trouble. Last week Sony Corp. posted a net loss of 37.1 billion yen for the April-June quarter, while Sharp Corp. fell 25.2 billion yen into the red in the same period.