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Panasonic has followed Sony by announcing a record loss of $A5 Billion dollars. The result has been blamed on slack demand for plasma TV’s, digital cameras and other consumer electronic goods.
Panasonic has followed Sony by announcing a record loss of $A5 Billion dollars. The result has been blamed on slack demand for plasma TV’s, digital cameras and other consumer electronic goods.
Ironically their shares jumped 4.8% on the news.
Panasonic said that business had slumped across all segments of their operation. Sales were down 14.4 percent and operating profit tumbled 86 percent.
For the January-March quarter, Panasonic booked a record net loss of 444.3 billion yen compared with a profit of 61.6 billion yen a year earlier.
Last year posted a record net profit of 281.9 billion yen.
Unlike Sony, who has failed to make any profit from their Bravia LCD TV’s or Playstation gaming consoles, Panasonic had been making a profit untill the economic downturn hit.
Panasonic has said that will now implement “drastic business structural reforms” to try to engineer a recovery.Overseas sales were hit particularly hard, however Australia was the exception with the local subsidary reporting “its best year ever”.
Sales of flat screen TVs, digital cameras, home appliances and semiconductors all fell globally.
The group also expects to make a big loss for the year to the end of March 2010, with sales expected to fall a further 10%.
The grim outlook was due to the “world recession and shrinking demand” as well as a shift towards “lower-priced products” the Company said.
But despite the predicted losses for this year, some analysts are confident that Panasonic will turn its fortunes around.
“Compared to Sony and other rivals, Panasonic has a good track record of restructuring its way back to profitability,” said Takeshi Osawa at Norinchukin Zenkyoren Asset Management.
“I have more faith in Panasonic’s ability to recover than I do for other firms such as Sony,” he added.
Earlier this year, the group, which is the world’s largest maker of plasma TVs, announced 15,000 job cuts and 27 plant closures worldwide.
According to Associated Press President Fumio Ohtsubo has said he wants to shutter unprofitable business lines, shift resources to those with growth potential and improve product quality. The firm is closing factories and aims to cut about 5 percent of its 300,000-strong global work force by next spring.
The electronics maker is also awaiting legal clearance for its $9 billion takeover of smaller Japanese rival Sanyo Electric. The deal would create one of the world’s biggest electronics companies and enable Panasonic to add Sanyo’s strengths in “green” energy technology.
