Osaka, Japan - Panasonic returned to profitability but also reported lower sales in its fiscal first quarter, ended June 30.
The net income of 12.8 billion yen for the quarter reduces a loss of 30.4 billion yen in the prior year's first quarter.
Operating profit increased to 38.6 billion yen, from 5.6 billion yen a year ago. Despite the sales decline and yen appreciation, the results were due mainly to fixed cost reductions and streamlining of material costs, the company said.
Consolidated group sales for the first quarter decreased by 6 percent to 1,814.5 billion yen due mainly to weak demand for A/V products in Japan, compared with 1,929.5 billion for the prior year's first quarter.
Among the factors hurting sales was the home electronics market, especially flat-panel TVs, where Panasonic said it emphasized profitability over sales. Another drag on sales growth has been the slowdown in the global economy, and the European financial crisis.
Sales in the Americas were up 2 percent on a yen basis and 5 percent in local currency compared with the prior year's fiscal first quarter due to stable CE sales and good automotive systems sales.
And while Panasonic did report that flat-panel TV sales were down, it did turn an operating profit of 25 billion yen in the quarter, reversing the prior year's 11 billion yen operating loss, due to a restructuring, cost improvements and an emphasis on larger screen sizes.
In its AVC networks segment, sales decreased by 20 percent to 359.7 billion yen, from 449.9 billion yen a year ago. Despite favorable sales of PCs and others, this result was due mainly to significant sales decline in flat-panel TVs and Blu-ray Disc recorders in Japan. Segment profit significantly improved to 7.4 billion yen, compared with a loss of 3.8 billion yen a year ago, due mainly to fixed cost reduction and restructuring effects, Panasonic said.
Appliance segment sales increased by 3 percent to 431.4 billion yen, compared with 417.7 billion yen a year ago. Despite sales decreases in compressors and motors, the result was due mainly to sales increases in refrigerators and washing machines. Segment profit increased by 7 percent to 37.4 billion yen, compared with 34.9 billion yen a year ago due mainly to fixed cost reduction.