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Aiwa Q3 Sales Drop 27%, Loss Narrows

1/30/2002 01:53:00 PM Eastern

Tokyo - Hard hit by a slowing global economy and what has been called an uninspired product line, audio equipment maker Aiwa posted a 27.3 percent sales decline in its fiscal third quarter, hitting $505.8 million, down from $695.7 million in the third quarter of 2000.

The company reported a narrower net loss for the third quarter, down to $28.8 million, compared with $49.7 million in the year-ago three months.

Aiwa, a subsidiary of Sony, which has reported net losses for the past three years, said its effort to trim its inventories and reduce its workforce by nearly half, should result in a profitable net next fiscal year, beginning in April of 2002.

Aiwa, however, left unchanged its earnings forecasts for the full current fiscal year ending March 31, compared with the downward revised figures presented last September. At that time, the stereo and TV maker said its net loss for the year would be $303 million, somewhat higher than the $295.4 million reported in 2000. Sales are expected to be $1.52 billion, down by nearly one third.

Sony, which has over a 60 percent stake in Aiwa, has been helping the company with financial support and management guidance. Sony said it will decide on its plans for Aiwa by the end of March. In the meantime, Aiwa has announced several new products for this spring, including flat-panel televisions and a new line of stereos.

In the third quarter, Aiwa audio products accounted for nearly 83 percent of overall business, with sales hitting $419.2 million, down 24.7 percent from the $556.4 million reported in the year-ago period. Video products, which held down nearly 15 percent of Aiwa's third-quarter sales, come in at $74.2 million, off 43.6 percent from the $131.5 million recorded in the same quarter in 2000.

For the nine months, audio sales reached $943.6 million, down 30.9 percent from the $1.4 billion reported in the same nine months in 2000. Video sales accounted for $224.9 million in the nine months, a 29.7 percent decline from the $319.9 million registered in the same period the previous year.

Sales in North and South America, nearly a 42 percent share of Aiwa's business in the third quarter, dropped 28.8 percent, to $210.7 million, down from $296 million the previous year. Sales in North and South America for the nine months, about a 40 percent share of market, slid 34.3 percent, to $468 million, down from $712.2 million in the same period in 2000.

Overall Aiwa sales for the nine months declined 30.7 percent, hitting $1.2 billion, down from $1.7 billion in 2000. The company increased its net loss for the nine months, to $201.8 million, up from a loss of $130.4 million in the same period the previous year.