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Several top Japanese CE manufacturers reported decidedly mixed results for their quarterly and/or fiscal first half financial performances last week.
Toshiba was an exception, reporting a 17 percent gain in net sales, to $32.1 billion, in its fiscal first half compared with the same time last year, and net income increased more than seven times that of last year's first half, to $397 million.
Digital products — which includes PC, CE categories HDTV and HD DVD, mobile phone and business products — posted a 9 percent gain in sales to $12.5 billion and reversed last year's loss to a $2.6 million operating profit. The company noted that TVs still had to "bear the brunt of fast declining sales prices, particularly in the U.S. and Europe."
Matsushita Electric Industrial, worldwide marketer of the Panasonic brand, reported a 17 percent decrease in net income for its fiscal second quarter, ended Sept. 30, due in part to restructuring, among other factors.
Matsushita reported net income of $572 million on consolidated group sales of $19.88 billion for the quarter, an increase of 1 percent. The CE manufacturer cited sales gains in all product categories except JVC and its subsidiaries. (See below.)
The company said it faced "severe business conditions in Japan and overseas" due to rising crude oil and other raw material costs and "continued price declines" in digital products. Other expenses that affected its bottom line were the implementation of early retirement programs as it restructures.
By category, AVC Networks' sales increased 8 percent to $16.7 billion with audio and video equipment rising 6 percent from the previous year's first half, due mainly to gains in flat-panel TVs and digital cameras. Car electronics and mobile phones were up 10 percent vs. the previous year's first half.
JVC, Victor Company of Japan, which has set up a joint venture with Kenwood to develop car, home and portable audio products earlier this year as a possible prelude to a full merger in 2008, reported lower sales and a deeper loss in its fiscal first half, ended Sept. 30.
Total sales for the half were $2.87 billion, down 11 percent from $3.23 billion, while JVC reported a net loss of $365.7 million for the half vs. a $43.7 million net income for the first half of last year. In consumer electronics, sales were $2.09 billion, down from $2.37 billion.
JVC said its restructuring continues, but sales of "mainstay consumer electronics" were sluggish in its fiscal second quarter. While LCD TV sales performed "fairly well," sales of CRT TVs and D-ILA rear-projection TVs were down. Audio and camcorder sales "struggled somewhat," the manufacturer reported.
Pioneer Electronics reported for its fiscal second quarter, ended Sept. 30, net loss of $20.8 million and a 79.6 percent drop in operating income to $8.2 million vs. the previous year's second quarter. Consolidated operating revenue was up 6.3 percent to $1.74 billion mainly due to higher sales of car audio products and DVD drives for PCs and the weaker yen, Pioneer reported.
In the home electronics segment, sales were up 4.6 percent to $777.8 million with the operating loss for the quarter at $35.7 million. The main problem has been a decrease in plasma TV sales for OEM and business use, although Pioneer reported that "home-use sales rose slightly" but that was based on Europe with lower sales in North America and Japan. Sales of DVD drives for PCs rose, but sales of DVD recorders decreased.
In car electronics, sales increased 10.9 percent to $806.3 million, mainly due to increased sales of both car audio products and car navigation systems. In North America, OEM sales of car navigation rose, the company reported. Operating income in this segment increased 7.9 percent year-on-year to $52.4 million.
In forecasting the balance of the fiscal year, Pioneer, which received an investment by Sharp earlier this year, has reduced its previous forecasts due to a larger-than-expected loss in home electronics due to plasma display sales. But it confirmed that it will consider adding LCD TVs to its lineup of smaller sizes than plasma with Sharp's cooperation.
In plasma, where it introduced its high-end Kuro line earlier this year, Pioneer said it will continue to offer plasma displays "with high picture quality" and will offer "unique value propositions by enhancing combinations and links between plasma displays and other audio/video products." Pioneer also said it will focus on Blu-ray Disc products and reiterated it will work with Sharp to "promote joint development in each business" in order to develop new products and businesses.
At Hitachi, its digital media and consumer products had 4 percent lower revenue to $6.33 billion for its fiscal first half, which ended Sept. 30. The segment's operating loss was $442 million, $141.7 million more than the previous fiscal year's first half.
Hitachi blamed overall segment revenues reflected in lower projection-TV sales due to greater demand for flat-panel TVs and lower sales of its mobile phone business, which had strong growth last year. The company cited the North American market for flat-panel TVs as having lower-than-expected sales and lower prices. Hitachi did say that there was growth in room air conditioners, commercial air products and washing machines.
In its report, Hitachi reiterated its effort to increase its market share by bring its 35mm ultra-thin LCD TV to the Japanese market by the end of the year. The company is concentrating production at its Miyazaki Works belonging to the plasma display panel production subsidiary Fujitsu Hitachi Plasma Display Limited.
Company-wide, Hitachi reported revenues of $45.9 billion for the half, up 11 percent, and a net loss for the half of $108 million, a $565.2 billion improvement over last year's fiscal first half.
Along with Japanese suppliers Logitech International, based in Switzerland with operations in Fremont, Calif., reported final financial results for the second quarter of fiscal year 2008 last week. In an update of its Oct. 17 report the company recorded an impairment loss of $67.4 million on the value of its short-term investment portfolio as of Sept. 30, 2007. As a result, net income for its fiscal second quarter was $12 million. Excluding this charge, non-GAAP net income for the quarter was $79 million compared with $49 million in last year's fiscal second quarter.