Panasonic Corp yesterday said it would book a mammoth ￥765 billion (US$9.6 billion) net loss in the fiscal year to March as the Japanese consumer electronics giant undergoes a major overhaul of its troubled business. While the firm said it would achieve an operating profit, restructuring costs and writedowns would see it post the massive shortfall.
This would be close to the record ￥772.2 billion net loss last fiscal year, one of the worst-ever losses for a non-financial Japanese firm.
Panasonic, which had earlier said it expected to post a net profit of ￥50 billion in the fiscal year to March next year, also cut its annual sales forecast to ￥7.3 trillion from ￥8.1 trillion.
Panasonic said its sales in the first half of the fiscal year tumbled amid slumping demand for its flat-panel televisions, digital cameras and mobile phones, as it booked a ￥685 billion loss for the six months to September.
Restructuring expenses alone in the current fiscal year would be about ￥440 billion, more than 10 times the firm’s original forecast.
“Despite signs of a moderate recovery, the global economy continues to contract with much deep remaining uncertainty due to the European financial crisis and slowdown of the Asian economic expansion including China,” Panasonic said in a statement.
“The electronics industry continued to be difficult with a downturn in digital products, especially flat-panel TVs, and a sales decline in electronic components,” it added.
Panasonic, like rivals Sony Corp and Sharp Corp which report earnings this week, has suffered in its television business amid falling prices and stiff competition from overseas rivals. It accumulated debt from the purchase of smaller rival Sanyo Electric Co.
Domestic electronics and technology giants Toshiba Corp and Fujitsu Ltd yesterday also both slashed their full-year profit forecasts.
Television and laptop computer maker Toshiba cut its net profit outlook to ￥110 billion from ￥135 billion for the year to March. IT and electronics giant Fujitsu said it lost ￥11.0 billion in the first half of the fiscal year and chopped its sales and profit outlook.
Japan’s electronics sector has been badly hit by the rise of the yen and stiff competition from South Korea’s Samsung Electronics Co and US-based Apple Inc, while falling prices and slow demand in Japan have also eaten into profits.