Matsushita Q2 A/V Sales Climb 9%

OSAKA, JAPAN — Strong sales of digital audio/video products, such as flat-panel TVs and digital cameras, pushed up overall sales of video and audio equipment 9 percent in Matsushita Electric Industrial's fiscal second quarter, reaching $3.5 billion, compared with $3.2 billion in the year-ago period.

This increase was more than sufficient to offset sales declines in audio equipment.

Sluggish sales of cellphones wiped out increases in PC and automotive electronics, leaving Matsushita's information and communications equipment sales down 1 percent in the second quarter, ended Sept. 30, coming in at $4.7 billion, compared with a year-earlier $4.8 billion.

Matsushita's overall AVC networks segment, which combines the A/V and communications categories, enjoyed a 3 percent sales increase in the second quarter, hitting $8.2 billion, up from $8 billion in the same three months in 2003.

Overall AVC networks segment profit increased 17 percent for the six months, rising to $615 million from a year-earlier $547.8 million.

Matsushita's six-month sales to the Americas dipped 2 percent, down to $5.8 billion from $6.2 billion. However, segment profit for this period rose 11 percent to $104 million from $96.8 million in the same time frame last year.

For the six months, total AVC networks segment sales edged upward 1 percent, reaching nearly $16 billion. The A/V equipment category jumped 9 percent in the first half, to $6.6 billion from $6.3 billion, while the communications category dropped 4 percent to $9.1 billion from $9.7 billion.

With the U.S. economy showing modest progress, and higher sales growth rates elsewhere, Matsushita registered an 18 percent consolidated sales gain in the second quarter, hitting nearly $20 billion, up from a year-ago $17.6 billion.

Negative earnings factors — such as a strong yen, rising raw materials costs and intensified global price competition — were more than offset by the sales increases. Therefore, consolidated operating income soared 189 percent to $1 billion, compared with $560 million in the same quarter a year ago. Net income jumped 14 percent, reaching $210 million in the second three months, compared with $192.1 million in the same period in 2003.

For the six months, Matsushita consolidated revenue was up 19 percent to $38.9 billion from $34.2 billion in the first half of last year. Operating income rose 96 percent to $1.4 billion in the six months, from $748 million, while net income more than doubled in the period to $506 million from a year-earlier $217.5 million.