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JVC CE Sales Off 4.1%

10/27/2005 12:08:00 PM Eastern

Tokyo — D-ILA hybrid projection systems and camcorders helped grow consumer electronics sales in the Americas during the fiscal first half for Victor Company of Japan (JVC), but these products could not make up for problems with DVD recorders and LCD televisions.

The company’s CE business overall decreased 4.1 percent in the three months, hitting $2.49 billion, down from $2.59 billion.

Overseas sales in the CE business slipped 5 percent during the first half, down to $2 billion, from $2.1 billion in the same period the prior year.

Software and media business at JVC for the first half, ended Sept. 30, was the company’s only business division to register growth during the period. The increase was due to improved year-on-year hit releases signed to Victor Entertainment.

The category includes music and music software, such as CDs, videodiscs and prerecorded music and video tapes and blank media. Overall sales in the first half rose 7 percent, reaching $440.3 million, compared with $412.3 million in the first six months of last year.

Overseas sales in the software and media segment moved up 4 percent in the first six months, climbing to $59.6 million from a year-ago $57.8 million.

Consolidated net sales at JVC during the first six months dropped 6 percent to $3.34 billion, from $3.54 billion year-on-year, due to a “tough struggle” in the CE segment, affected by quality issues with DVD recorders that resulted in delayed development.

Also having a major impact on consolidated six-month JVC sales were delays in the development of LCD televisions, especially in Europe, though the camcorder business showed “drastic improvement,” and the car electronics business continued its “robust performance,” said JVC.

The company reported a consolidated operating loss for the first half, down to $32.2 million, compared with operating income of $37.5 million year-over-year. The loss was due to JVC’s inability to lower purchasing costs and fixed expenses to compensate for negative factors such as quality issues with DVD recorders in the CE business. Also having a major impact were delays in the development of display products.

JVC increased its six-month net loss to $132.2 million, compared with a loss of $37.7 million in the first half of last year. The situation was impacted by the accrual of extraordinary losses resulting from the company’s retirement program, which was implemented in an effort to revamp management.