Panasonic sees $5.5bn loss, worst in a decade
Tokyo , October 31, 2011
Japanese electronics maker Panasonic Corp forecast an annual net loss of 420 billion yen ($5.5 billion), its worst in a decade, as restructuring costs soared and weak demand in the US and Europe eroded income.
Panasonic, grappling with the cost of layoffs as it cuts expenditure and strips out overlapping businesses after its buyout of subsidiary Sanyo, was also hit by a soaring yen.
The loss, which will be its second biggest ever, compares with the company's previous forecast for a net profit of 30 billion yen in the year to March 2012 and last year's net profit of 74 billion yen.
"What we need to tackle is the television and related semiconductor businesses," chief financial officer Makoto Uenoyama told reporters. "If we downsize these, our profits will be completely different."
The maker of Viera televisions and Lumix cameras cut its full-year operating profit forecast to 130 billion yen from 270 billion yen.
That is far below market expectations of a 225 billion yen profit, based on the average estimate of 21 analysts polled by Thomson Reuters I/B/E/S. It also slashed its estimate for annual TV sales to 19 million sets from 25 million.
For July-September, the company reported an operating profit of 42 billion yen, beating its own forecast of 4.4 billion yen profit, but falling short of analysts' average estimate of 50 billion yen. It had reported an operating profit of 85.2 billion yen a year earlier.
Global consumer confidence remained weak with more than 60 percent of consumers saying it was not a good time to spend and one in three North Americans saying they had no spare cash, according to a survey by Nielsen published at the weekend.
The soaring yen is making it harder for Panasonic to compete with the likes of Samsung Electronics. For the remainder of the business year, Panasonic estimates a dollar-yen rate of 76 yen and a rate of 105 yen against the euro.
In April, Panasonic said it would cut 17,000 jobs and close up to 70 plants. Sources have said it will slash plasma TV panel output and drop plans for a solar panel factory and a battery plant expansion in Japan. - Reuters