Poor Quality Plagues JVC. Big Losses

JVC has reported an increases in losses while it battles with poor quality DVD players, old generation LCD TV’s and bottom end home theatre kit inventory.

Struggling Japanese Company JVC has reported a net loss to $177 million, compared with a loss of $49 million in the first half of last year. The big problem for JVC is falling DVD and LCD TV sales along with issues relating to poor quality DVD players and delays in moving to the next generation in LCD TV’s. The company’s CE business overall decreased 4.1 percent in the three months, hitting $3.32 billion, down from $3.45 billion. In Australia JVC is distributed by Hagemeyer a company who because they are a distributor have not neen able to deliver price drops on both JVC plasma and LCD TV’s when other vendors have delivered cost savings.

Overseas sales in the CE business slipped 5 percent during the first half, down to $2 billion, from $2.1 billion in the same period the prior year.Consolidated net sales at JVC during the first six months dropped 6 percent to $3.34 billion, from $3.54 billion year-on-year, due to a “tough struggle” in the CE segment, affected by quality issues with DVD recorders that resulted in delayed development. Also having a major impact on consolidated six-month JVC sales were delays in the development of LCD televisions, The company reported a consolidated operating loss for the first half, down to $32.2 million, compared with operating income of $37.5 million year-over-year. The loss was due to JVC’s inability to lower purchasing costs and fixed expenses to compensate for negative factors such as quality issues with DVD recorders in the CE business. Also having a major impact were delays in the development of display products.