Sat, May 12, 2012 - Page 10 News List

Sony, Panasonic shares plummet on huge annual losses

BIG HITS:Sony Corp shares plunged yesterday after it posted a US$5.7 billion annual loss, only for it to be outdone by Panasonic Corp shortly after the closing bell

AFP, TOKYO

Sony Corp and Panasonic Corp shares plunged to their lowest levels in more than three decades yesterday as investors fretted about the future prospects for two of Japan’s most iconic firms amid massive losses.

Sony, which reported a record US$5.7 billion annual loss on Thursday, dived 6.43 percent to ¥1,135, while Panasonic closed down 1.55 percent at ¥570 shortly before posting a record US$9.67 billion annual loss yesterday.

The firms’ shares stood at their lowest level since at least 1980, taking into account previous stock splits, according to the online edition of the Nikkei business daily.

Meanwhile, shares in Sharp Corp, which has posted a record US$4.7 billion annual net loss, also ended at their lowest level in decades, down 5.1 percent at ¥390.

The sell-off came after Sony said on Thursday it lost ¥456.66 billion (US$5.7 billion) in the year to March, its fourth consecutive year in the red, but vowed to swing back to profitability this year.

Sony has struggled to stem losses at its television division, and it counted a strong yen and natural disasters among the reasons for its disastrous results.

RECORD SHORTFALL

Shortly after the closing bell yesterday, Panasonic confirmed earlier warnings of a record loss, among the worst-ever shortfalls recorded by a non-financial Japanese company.

“This result was due mainly to price declines and the appreciation of the yen, in addition to a sales decrease affected by the Great East Japan Earthquake and the flooding in Thailand,” the company said in a statement.

However, Panasonic also projected it would return to the black in the current fiscal year to March 2013 with a net profit of ¥50 billion.

“Although the company expects some risks to continue, the global economy is expected to show a slow recovery in fiscal 2013,” the firm said. “Under such business conditions, Panasonic regards fiscal 2013 as the first year in which it will achieve positive results following large-scale structural reforms and reorganization.”

The latest results stand in stark contrast to Panasonic’s net profit of ¥74 billion in the year to March 2011, and its first forecast for the current year, which was for a ¥30 billion profit.

Panasonic, along with Sony and Sharp, has been fighting a losing battle for years against fierce competition from the likes of South Korea’s Samsung Electronics Co and US-based Apple Inc.

Japan’s electronics sector has also been badly hit by the appreciation of the yen, which makes exporters’ products less competitive overseas, while falling prices and slow demand at home have also eaten into profits.

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