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Monday, Oct. 31, 2011

Panasonic to report second-biggest loss

Staff writers

Reversing an earlier projection of a ¥30 billion profit, Panasonic Corp. said Monday it expects to post a group net loss of ¥420 billion for the current business year ending next March.

The consumer electronics giant blamed intensifying competition, the higher yen and mounting fees to restructure its TV business. It would be the second biggest loss after fiscal 2001.

For the fiscal year, Panasonic also projects a group operating profit of ¥130 billion, down 57.4 percent from a year ago, and group sales of ¥8.3 trillion, down 4.5 percent from fiscal 2010.

Panasonic said it estimates the cost for the current business year of restructuring its business, including reorganizing some divisions, at about ¥514 billion.

As a result of the business restructuring, Panasonic President Fumio Otsubo said the total number of employees is expected to be below 350,000 at the end of next March. As of last March, the firm had about 365,000 employees.

It also said its group operating profit for the second quarter that ended in September was ¥47.6 billion, far below the ¥168.97 billion profit logged in the same quarter a year ago. It also said its group net loss was ¥136.15 billion, down from a ¥74.72 billion profit a year ago.

"Audiovisual-related businesses, especially TVs and semiconductors, are the businesses we have to tackle," Executive Managing Director Makoto Uenoyama told a news conference in Tokyo. "Those are deeply in the red. It is especially true for the TV business, which has been in the red since fiscal 2008."

Citing the robustness of other businesses, such as home appliances and Pana Homes home construction, Uenoyama said the firm will focus more on environmentally friendly energy, including solar panels and chargers for electric vehicles and plug-in hybrid cars.

To restructure its money-losing TV business, Panasonic plans to cease production of plasma displays at its No. 3 plant in Amagasaki, Hyogo Prefecture, by the end of fiscal 2011 as well as an LCD panel factory in Mobara, Chiba Prefecture.

Along with South Korean electronics makers taking advantage of the won's depreciation, Otsubo said makers worldwide have flooded the market with flat-panel TVs in recent years, and that has driven down prices and made it difficult for Panasonic to differentiate its products.

Asked if the firm plans to focus less on the TV business, where Panasonic has gained a reputation for signature products, Otsubo said things won't change drastically.

"The TV business continues to be very important for the company. The problem is that we are not making profits from that business. Therefore, we are restructuring" and hope to return the TV segment to the black in the next fiscal year, he said.

Yen hits Toshiba sales


Toshiba Corp. said Monday its consolidated net profit in the April to September period fell 18.5 percent to ¥22.67 billion as the yen's appreciation hurt sales of personal computers and semiconductors in particular.

Operating profit declined 23.4 percent to ¥80.25 billion on sales of ¥2.91 trillion, down 5.5 percent. The earnings of the infrastructure business were also eroded by the strong yen, Toshiba said.

The home appliance division saw higher sales as energy-saving items such as light-emitting diode lamps and air conditioners sold well.

The company is standing by its earlier forecast for the current business year through March, projecting a group net profit of ¥140 billion, up 1.6 percent from the previous fiscal year, and operating profit of ¥300 billion, up 24.9 percent, on sales of ¥7 trillion, up 9.4 percent.

Mitsubishi profit falls


Mitsubishi Electric Corp. said Monday its group net profit for the April to September period fell 2.4 percent from a year earlier to ¥69.58 billion due partly to appraisal losses in its shareholdings.

Its group operating profit rose 0.6 percent to ¥113.61 billion on sales of ¥1.74 trillion, up 1.9 percent, as its factory automation system business grew amid rising demand for smartphones and tablet computers, the company said. Smartphones and tablet computers are produced by Mitsubishi Electric's factory automation system division.

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