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Matsushita Posts Dramatic Profit Gains

10/27/2006 09:33:00 AM Eastern

Osaka, Japan – Matsushita Electric Industrial, marketers of the Panasonic brand, reported a major increase in net income and a gain in consolidated group sales due to digital A/V products for its fiscal second quarter ended Sept. 30.

Net income increased a whopping 156 percent to $672 million while operating profit was up 14 percent to $1.21 billion versus the same quarter last year. The company said the improvements were due mainly to a decrease in expenses associated with early retirement programs versus last year.

Consolidated group sales for the second quarter were up 2 percent to $19.1 billion. Matsushita cited sales gains in digital A/V products, home appliances, components and devices, among other operations. Overseas sales increased 3 percent to $9.61 billion for the quarter.

While profits and sales were up, Matsushita did report that the U.S. economy was in a slowdown during the quarter, rising raw material costs, and continuous price declines mainly in digital A/V products due to intensified global competition.

For the first half Matsushita reported a 3 percent sales increase to $37.2 billion, with net income again up a whopping 79 percent to $976 million. Operating profit was also up dramatically during the first half, 21 percent to $1.76 billion.

Digital A/V and flat-panel products drove sales during the first half with overseas sales being up 6 percent to $18.72 billion.

Concerning individual divisions, AVC Networks, the unit where most of its consumer electronics products reside, had a sales gain of 1 percent to $15 billion during the first half. Sales of audio/video products, flat panel TVs and digital cameras as part of AVC’s business was up 8 percent versus last year. Sales were also strong for PCs and automotive electronics, but mobile phone sales in Japan and overseas were down 3 percent during the half.

In home appliances sales were up 4 percent to $5.12 billion due to “favorable sales” of air conditioners and compressors.