Panasonic Corp shares soared nearly 17 percent yesterday as investors reacted to the Japanese electronics giant’s latest earnings, while rivals Sony Corp and Sharp Corp also spiked on upbeat sentiment.
Panasonic closed 16.89 percent higher at ￥692 in Tokyo, following the company’s announcement after the close of Friday’s session that it posted an operating profit of ￥121.95 billion (US$1.32 billion) in the nine months to December last year, and a ￥61.4 billion net profit in the last three months of last year.
That marked a huge reversal from a net loss of ￥197.6 billion a year earlier, with Panasonic citing aggressive cost-cutting as part of a massive corporate overhaul aimed at stemming record losses.
“The recent rise in the share price reflects the market starting to factor in post-restructuring profit levels,” Credit Suisse analyst Shunsuke Tsuchiya said.
However, Panasonic also said it lost about US$6.77 billion in the nine months to December last year and was on track to lose a whopping US$8.3 billion over its fiscal year to next month, after posting a record net loss in the previous year.
Shares of Sony, which reports earnings this week, jumped 7.52 percent to ￥1,457, while Sharp stock finished 5.47 percent higher at ￥347, after the embattled maker of Aquos-brand electronics offered a glimmer of hope on Friday, saying it eked out a small operating profit in last year’s October to December quarter.
The embattled trio have seen sales slump on the back of the global slowdown, a strong yen, fierce overseas competition and strategic blunders as they also took on huge restructuring costs which hit their bottom lines.
However, the firms have been helped by the yen’s recent slide, which makes exports more competitive and increases the value of repatriated foreign earnings.
Yesterday’s surge was also due to short-covering by investors who had bet on a decline in the firms’ share prices, analysts said.
“There is some net-long buying, but the overwhelming driver right now is short-covering,” an equity strategist told Dow Jones Newswires. “For yen-sensitive companies that report a return to the black, the effects are potentially doubly beneficial for share prices.”