Panasonic sees $5.5 bln annual loss, worst in a decade

 
Head Office in Kadoma,Osaka


Source :REUTERS 31,Oct,2011


TOKYO: Japanese electronics maker Panasonic Corp forecast an annual net loss of 420 billion yen ($5.5 billion), its biggest in a decade, as it cut unprofitable businesses deeper and faster than first planned, while battling a soaring yen and weak demand in the United States and Europe. 


Panasonic accelerated the pace of restructuring as it races to shake off losses at its TV unit -- a problem it shares with rival Sony -- and strips out overlapping businesses after its buyout of subsidiary Sanyo. 


In April, Panasonic said it would cut 17,000 jobs by March 2013, but the maker of Viera televisions and Lumix cameras announced on Monday it now expects to reach its goal of slimming its work force to 350,000 or fewer a year ahead of schedule. 


Panasonic said it will stop liquid-crystal panel production at its Mobara plant near Tokyo and is canceling its plans to ship plasma-panel manufacturing equipment from another mothballed plant to Shanghai to start production there, as it aims to turn a profit on TVs in its next fiscal year. 


One analyst said the dramatic slide in profits might not lead to a sell-off of Panasonic's stock. 


"The net loss of 420 billion yen includes an increase in the cost of restructuring. It has lowered the assumed exchange rates to 76 yen, which gives the company some buffer even if the dollar slips from the current level after today's intervention," said Hiroyuki Fukunaga, CEO of Investrust. 


"So even though it is reporting a loss, the market may think all the negative factors have been priced in, especially given that its share price has fallen about a third from around 1,200 yen at the beginning of this year." 


Panasonic said it would incur 514 billion yen in restructuring costs, about half of it in the TV business, for the year to March, compared with an earlier forecast of 110 billion yen. 


The Japanese government intervened in the currency market for the second time in less than three months after the yen hit another record high against the dollar on Monday, selling yen to counter speculative trading that officials say is hurting the world's No.3 economy. 


Panasonic's annual loss, which will be its second biggest ever, compares with the company's previous forecast for a net profit of 30 billion yen in the year to March 2012 and last year's net profit of 74 billion yen. 


Shares of the company closed 2.1 per cent lower before the results. They have fallen 31 per cent so far this year, compared with a 13 per cent decline in the broader market .