Panasonic reports $7.5-bn loss; sees profit next year
11 May 2013
Japanese electronics giant Panasonic Corp posted huge losses for the second straight fiscal ended March 2013 driven by massive restructuring costs, slump in demand for its products and a strong yen.
Panasonic's net losses for the year was ¥754 billion ($7.5 billion), compared with a loss of ¥772 billion last year.
Operating profit for the year more than tripled to ¥161 billion, beating analysts forecast of ¥146 billion, while revenue dropped 7 per cent to ¥7.3 trillion.
Cumulative losses for the last two years are about $15 billion, indicating a steep decline in the Japanese consumer electronics industry as a result of the global economic slow down.
The company which makes Viera TVs and Lumix digital cameras lost market share for its products to South Korean rivals Samsung electronics and LG in the global market. Its TV market share dropped to 6 per cent last year from 7.8 per cent in 2011, while Samsung and LG boosted their shares to 28 per cent and 15 per cent during the year.
Demand for Panasonic's television panels, digital cameras, Blu-ray disc players and personal computers plunged, as consumers are switching over to products such as smartphones and tablet computers.
Sales in the company's AVC Networks segment, which includes TVs and display devices slumped 20 per cent while sales in Systems and Communications segment, which makes mobile phones decreased by 12 per cent.
According to some analysts, ''Panasonic is losing ground in televisions and lacks a significant position in smartphones and tablets, which are central to the consumer electronics business today.''
For the financial year 2014, the company expects to churn out a net profit of ¥50 billion with a 55-per cent increase in operating profit at ¥250 billion and 1-per cent drop in revenue at ¥7.2 trillion.
The company's president Kazuhiro Tsuga, who over a year ago, planned to spend ¥250 billion in restructuring its operation over the next two years, and boost the operating margin to 5 per cent by eliminating low-profitability units and focusing on new growth areas in automotive and environmentally friendly technologies for home products.
Panasonic's chief financial officer Hideaki Kawai told reporters in Tokyo yesterday: ''We made significant efforts in terms of restructuring. More needs to be done this fiscal year and we will carry out measures with speed.''
The company's total assets at the end of fiscal 2013 decreased to ¥5.4 trillion, a drop of ¥1.2 trillion from the end of fiscal 2012.
Panasonic shed over 37,000 jobs over the past two years and now has about 294,000 workers on its rolls.
Persistent weakening of the yen against the US dollar is expected to help the company's exports and improve the overall profitability. The yen fell to a four-year low against the dollar breaking the psychological ¥100 barrier on Thursday and was traded above ¥101 on Friday, as investors welcome moves by the central bank to boost the nation's economy.
Since the beginning of the year, Panasonic shares have gained 43 per cent, while shares in Sony surged 87 per cent. The benchmark Nikkei 225 index gained 41 per cent during the period.
Rival Sony Corp reported yesterday $436 million profit for the fiscal year ended March, its first profit in five years and said that net income may rise 16 per cent this fiscal on increased sales. (See: Sony back in the black with $436 mn net profit for FY'13 ).