Matsushita Posts 41% Fiscal Year Profit Gain

By Steve Smith -- TWICE, 5/7/2007

OSAKA, JAPAN — Matsushita Electric Industrial, marketers of the Panasonic brand, reported a net profit increase of 41 percent for its fiscal year, ended March 31, due in part to production efficiencies and the elimination of "redundancies throughout the Matsushita Group."

Net income increased to $1.84 billion, a double-digit gain, while operating profit for the fiscal year was up 11 percent to $3.89 billion "despite the effects from rising raw materials prices and ever-intensified global price competition. This improvement was due primarily to the cost reduction efforts including materials costs and fixed costs, and a weaker yen," the company said.

Consolidated group sales for fiscal 2007 increased 2 percent to $77.2 billion worldwide, and the company cited sales gains in digital products.

In Matsushita's AVC Networks division, where most of its consumer electronics products reside, sales were up 2 percent to $31.8 billion for the year with segment profits up 15 percent to $1.9 billion. Sales of video and audio equipment increased 6 percent from the previous year, due mainly to strong sales in digital A/V products such as flat-panel TVs and digital cameras.

Sales of information and communications equipment decreased 2 percent to $17.6 billion, and sluggish sales of mobile phones in Japan and overseas for the fiscal year — despite increased sales in automotive electronics — led to overall lower sales in this category.

In its home appliances, group sales increased 4 percent to $10.4 billion due mainly to favorable sales of air conditioners and compressors. Segment profits were up 8 percent to $707 million.

For the Americas, sales were down 1 percent to $11.5 billion while segment profits were up 34 percent to $191 million.

The only mention of JVC, Victor Company of Japan, was about the company's sales and earnings. JVC's fiscal year sales were down 9 percent for the year to $5.41 billion due to "sluggish sales of A/V equipment." It reported a segment loss of $48 million for the fiscal year. Matsushita is still reportedly negotiating to divest itself of its stake in JVC, and a decision is supposedly going to be made soon.

In its outlook for fiscal 2008, Matsushita cited "concerns about global economic conditions, mainly in the United States."