Severely impacted by setbacks in sales of mobile communications equipment, such as cellular phones, and weaker demand for core consumer electronics products, Matsushita Electric Industrial reported a net loss of $156.4 million in its fiscal first quarter, compared with net income of $75.8 million in the year-ago first quarter.
Adverse effects from global price competition, which were not fully offset by Matsushita's manufacturing cost reductions, led to an operating loss of $312 million in the first three months, compared with an operating profit of $171 million in the same quarter last year. The loss is said to be the company's first-ever quarterly setback.
Consolidated group sales in the first quarter moved down 6 percent to $13.51 billion, compared with $14.29 billion in the year-ago three months.
Growth in televisions and DVD-related equipment helped push sales of video and audio equipment up 3 percent in the fiscal first quarter ended June 30, to $3.2 billion, from $3.1 billion in the same quarter last year.
These products are part of Matsushita's new AVC Networks segment, which reported a 2 percent sales decline, to $7.66 billion, in the first three months, compared with $7.81 billion in the same three months in 2000.
Within the AVC Networks' information and communications equipment category, CD-R/RW drives and car A/V equipment recorded sales increases. However, setbacks in sales of mobile communications equipment, including cellular phones, led to a 5 percent overall sales decrease in the information and communications equipment category, hitting $4.5 billion, compared with $4.7 billion in the year-ago three months.
Faced with sputtering global demand, Matsushita reported that overseas sales were slow during the first three months, dipping 6 percent to $6.86 billion, compared with $7.31 billion in the year-ago three months.
Overseas sales of video and audio equipment within the AVC Networks segment increased 4 percent to $2.2 billion, said Matsushita. The company also pointed out that the U.S. economic slowdown had an adverse impact on the Asian and European economies.
In its forecast for the first half of fiscal 2002, Matsushita assumes that current severe business conditions will continue through its second fiscal quarter, due to growing uncertainty about the global economic outlook.
The company now expects six-month fiscal sales on a consolidated group basis to drop 10 percent, compared with the same period last year. The company said sales would be about $19.2 billion, compared with its late April forecast of $20.9 billion.
Net income for the fiscal six months also is expected to show a large decrease, resulting in an estimated net loss of about $362.1 million. The previous forecast called for net income of $72.5 million.
Matsushita said it might revise its previously announced annual sales and earnings forecasts for fiscal 2002 at a later date, pending further review and monitoring of developments in external and business conditions.