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Panasonic Posts Lower Sales, Profits

10/28/2008 11:00:00 AM Eastern

Osaka, Japan — Panasonic reported lower sales and 16 percent decrease in net profit in its fiscal second quarter, due to exchange rates and a sagging world economy among the factors.

Panasonic reported a 4 percent decrease in consolidated group sales for the quarter, to $23.5 billion, from the previous year’s $24.5 billion. Overseas sales decreased 4 percent to $12.1 billion, from $12.6 billion in the previous year.

Net income fell 16 percent to $594 million during the fiscal third quarter compared with $704.8 million in the previous year. Operating profit was down 19 percent to $1.27 billion in the quarter, down from $1.57 billion.

In its statement, Panasonic said during the quarter there was strong demand for flat-panel TVs related to the Beijing Olympics but “severe conditions continued in Japan and overseas, due mainly to rising prices for raw materials and energy, and price declines centered on digital products.”

In terms of profitability, Panasonic reiterated the higher cost of crude oil “and other raw materials” and the negative effects of a stronger yen against the dollar as well as “intensified global price competition.”

By category Panasonic reported during the quarter sales in its digital AVC networks unit, mostly consumer electronics, sales were up 11 percent worldwide, but information and communications sales were down 10 percent compared with the same time last year, due in part to “sluggish sales of automotive electronics,” the company said. Sales of home appliances were up 3 percent vs. the previous year.

This is the first time Panasonic Corporation has reported its financial results under its new name. Panasonic, formerly Matsushita Electric Industrial Co.,

renamed itself as part of a worldwide branding campaign

on Oct. 1.