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Panasonic Reports Lower Sales, Deeper Loss In Qtr.

Osaka, Japan — Panasonic reported lower sales and a deeper net loss for the second quarter of its fiscal year, ended Sept. 30. 10/31/2012 07:55:00 AM Eastern

Osaka, Japan — Panasonic reported lower sales and a deeper net loss for the second quarter of its fiscal year, ended Sept. 30.

Consolidated group sales for the second quarter decreased by 12 percent to 1,823.7 billion yen compared with 2,075.7 billion yen for the prior year’s second quarter, due mainly to sales decrease in digital products under severe global competition as well as weak Japanese markets for flat-panel TVs and global note PCs, Panasonic said.

Net loss attributable to Panasonic amounted to 698 billion yen compared with a loss of 105.8 billion yen a year ago as a result of the increase in valuation allowances to deferred tax assets.

Operating profit1 increased to 48.8 billion yen from 42 billion yen a year ago, due to fixed cost reductions and streamlining material costs. In the meantime, pretax loss was 316.5 billion yen compared with a loss of 141.9 billion yen a year ago, due mainly to business restructuring expenses.

Panasonic said that among the drags on its business has been “the electronics industry continued to be difficult with downturn in digital products, especially flat-panel TVs, and sales decline in electronic components.”

The company noted, “Under such business circumstances, Panasonic has been working towards filtering unprofitable models and enhancing B to B businesses with one of its basic guidelines, “ ‘Focus on Profitability.’ ”

Panasonic’s six-month consolidated sales and profits by segment with previous year comparisons showed that AVC networks’ sales decreased by 24 percent to 690 billion yen from 913.6 billion yen a year ago. This result was due mainly to significant sales decline in flat-panel TVs and digital cameras. Segment profit significantly improved to 19.9 billion yen, compared with a loss of 15.7 billion yen a year ago due mainly to fixed-cost reductions and restructuring effects.

At Sanyo sales decreased by 29 percent to 698.3 billion yen from 985.3 billion yen a year ago. The sales decline owing to the Sanyo-related business transfers implemented in fiscal 2012 led to the overall sales decrease. Segment profit decreased by 36 percent to 9.4 billion yen from 14.7 billion yen a year ago due mainly to sales decrease of the Manufacturing Solutions Company.

Regarding full year forecast for fiscal 2013, Panasonic revised its original sales forecast of 8,100.0 billion yen significantly downward to 7,300 billion yen, due mainly to worsening market conditions in digital consumer products and the slowdown economy in emerging countries.

Operating profit is expected to be 140 billion yen, a decrease from the previous forecast of 260 billion yen due mainly to sales decrease.

Net loss attributable to Panasonic is expected to be 765 billion yen, a deterioration from the previous forecast of an income of 50.0 billion yen mainly as a result of the aforementioned increase in valuation allowances to deferred tax assets.