Pioneer Projects Record Fiscal Year Loss

By Steve Smith -- TWICE, 2/23/2009

TOKYO — Pioneer Electronics' decision to exit the TV business by March 2010, cut 10,000 jobs worldwide and center on car electronics and other home electronics businesses was understandable after looking at its fiscal third quarter results and fiscal year projections.

Pioneer reported operating and net losses, as well as lower sales, for its fiscal third quarter, ended Dec. 31, and is projecting a record net loss of 130 billion yen, or $1.44 billion, for its fiscal year ending March 31.

The company plans to cut 6,000 full-time employees worldwide and 4,000 temporary workers.

Pioneer said in a statement it is exiting the TV business because “recent market conditions have changed far more than initially anticipated, and Pioneer has decided to withdraw from the display business after concluding there are no prospects for improving profitability under current conditions.”

In DisplaySearch's 2008 fourth-quarter market share report, Pioneer ranked fifth in U.S. plasma TV market, with a 2.6 percent share, down 9 percent from the prior year's fourth quarter.

The company said it will continue to provide after-sales services even after the withdrawal from the market.

While Pioneer acknowledges that car electronics is “severely affected by lower demand” for cars, it expects to recover in fiscal year 2011, ended March 31, 2011, and will shift its TV resources to emphasize telemantics.

In its home electronics business Pioneer will center on audio products, DJ equipment and cable TV set-top boxes .

In its optical-disc business Pioneer is “considering measures for improving profitability, including a joint venture.”

Pioneer reported a 37.8 percent drop in sales during its fiscal third quarter, to $1.44 billion, an operating loss of $117.8 million and net loss of $287.3 million. In the prior year's third quarter Pioneer reported net income of $18.7 million

At press time Pioneer had not responded to requests for information on the effects of the moves on U.S. operations.