Japanese CE Makers Feel Economic Downturn

Tokyo— The sluggish U.S. economy did much to curtail financial results over the fiscal first half at four of Japan's consumer electronics companies, cutting into profit as well as sales.

Toshiba Digital Media, which includes sales of consumer electronics and personal computers, decreased 7 percent in the company's fiscal first half, reaching $5.68 billion.

While falling prices hit all product sectors, Toshiba said sales of PCs in overseas markets dipped, demand for DVD players slowed and sales of cellular phones fell back in the United States. The company said PC peripherals recorded growth, and there was growing demand for color televisions in overseas markets.

Operating income for the first half in the Digital Media segment dropped $219.2 million over the six months, hitting a loss of $93 million, compared with a gain of $311.7 million in the same period last year. This reflects severe price competition in the global PC market, according to Toshiba.

In the first half, Toshiba and its consolidated companies experienced a larger than anticipated decline in sales and profit.

Stung by the triple whammy of a sharp downturn in the economy at the end of 2000, subsequent sluggish demand in the global IT business and an unexpected falling in demand for electronics devices such as semiconductors for digital products, Toshiba said consolidated net sales decreased 11 percent. This hit about $21.1 billion in the first half, compared to the year-ago period, while the company reported a net loss of $1.04 billion in the first half, compared to the same six months last year.

Hitachi's sales in North America increased by 11 percent for the company's fiscal first half, reaching $3.79 billion, compared with $3.41 in the same six months last year. However, the company posted an operating loss in North America in the first half, down to $127 million from an operating income of $33 million in the first half of last year.

Hitachi's Digital Media and Consumer Products segment increased sales 15 percent in the fiscal first half ending Sept. 30, reaching $4.90 billion, compared with $4.27 billion in the same six months last year. Increasing sales of projection televisions, especially in North America, were among the bright spots during this period, the company said.

The company's Electronic Devices segment, which includes personal computers and mobile phones, took a nosedive during the first half, dropping 76 percent to $6.43 billion in sales, compared with $8.48 billion in the same six months in 2000. The company said demand for PCs, mobile phones and other IT-related devices was lower than forecasts in the beginning of the period.

Growth in sales of computer tape products at Hitachi Maxell helped push segment sales up 15 percent year over year, hitting $4.9 billion in the first half.

Hitachi, which had overall consolidated net sales in the first half of $33.1 billion, down 2 percent from the same period last year, forecasts sales of $66.4 billion for the fiscal year ending March 31, 2002. The company, which had an operating loss of $354 million in the first half, forecasts a loss of $252 million for the full fiscal year.

Stagnant sales of electronic devices in the United States helped push down consolidated net sales 2.6 percent at Sanyo Electric in the first half ended Sept. 30. The company reported sales of $8.67 billion for the six-month period, compared with $8.9 billion in the year-ago six months. Overseas sales dropped 11.6 percent in the six months.

Sanyo reported steady sales in its A/V Information Communication Equipment segment, which includes digital cameras and mobile phones. Sales hit $3.4 billion in the first half, an increase of 11.1 percent over the same period last year.

Battery sales dropped 8.9 percent in the first half, down 8.9 percent to $1.1 billion, compared with the same half last year.

Consolidated net income for the six months decreased 68.4 percent, down to $53.8 million, compared with $170.1 million the previous year.

Mitsubishi Electric said large projection televisions enjoyed growth in the United States during the company's fiscal first six months, lifting its overall Home Appliances segment 4 percent to $3.1 billion in sales, compared with $3 billion in the year-ago six months.

However, Mitsubishi'a overall consolidated net sales dropped 7 percent, to $14.6 billion, in the fiscal first half, down from $15.6 billion in the same period in 2000. Consolidated net income decreased to $13.2 million for the six months, down from $622.2 million the previous year.