Japanese CE Makers Report Tough Fiscal Second Quarters - Twice

Japanese CE Makers Report Tough Fiscal Second Quarters

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NEW YORK –

Japanese CE makers had a tough fiscal second quarter, with due to still struggling North America and European markets, and exchange rates for the Japanese yen.

Japanese-based manufacturers Panasonic and Sony took the biggest hits in their fiscal Q3. For their Korean counterparts it was a mixed bag, with Samsung posting a profit but LG Electronics reporting a loss for the same period.

Panasonic

blamed its net loss and lower sales in its fiscal second quarter, ended Sept. 30 on economic factors, the higher value of the yen and lower prices for CE products.

Consolidated group sales for the second quarter decreased by 6 percent to 2,075.7 billion yen, from 2,206.8 billion yen, compared with the same period a year ago. Net loss was 105.8 billion yen in the quarter, compared with a profit of 31 billion yen a year ago. And its operating profit decreased to 42.0 billion yen, from 85.2 billion yen a year ago.

Panasonic is also projecting a net loss for fiscal year 2012 ending March 31, 2012, of 420 billion yen, compared with the previous forecast of an income of 30 billion yen, with lower sales of 8,300 billion yen, down from the previous 8,700 billion yen.

While there have been plenty of rumors about changes in its flat-panel TV business, no details on the restructuring of it, or the semiconductor business, were provided, which Panasonic expects to cost 404 billion yen.

Sony

reported a net loss and lower sales in its fiscal second quarter, projected a $1.2 billion loss for its fiscal year, and provided details on the realignment of its TV operations. (See p. 4.) Sony blamed its problems on three areas: foreign exchange rates for the yen; lower LCD TV sales and profitability; and, for the entire fiscal year, the impact of the floods in Thailand.

Sales and operating revenue for the quarter was 1,575 billion yen, or $20.5 billion, down 9.1 percent year on year. The net loss was 27 billion yen, or $350 billion, compared with net income of 31.1 billion yen year on year. Its operating loss of 1.6 billion yen, or $21 million, compared with operating profit of 68.7 billion yen last year was due to a decrease in gross profits due to lower sales in LCD TVs.

Sony is now projecting a net loss of 90 billion yen for the fiscal year ending March 31, 2012, as compared with a July forecast of a 60 billion profit and an actual loss of 259.6 billion yen in the prior fiscal year. Sales and operating revenue is now forecast at 6,500 billion yen, down from the July forecast of 7,200 billion yen and 9.5 percent down from the prior fiscal year’s results.

Toshiba’s

digital products segment during the fiscal second quarter, ended Sept. 30, which includes CE products, had higher operating income. Sales in this segment fell 5 percent to 450.9 billion yen, with operating income at 4.5 billion yen, rising 0.5 billion yen.

Toshiba said that while the segment recorded lower sales in Europe and the U.S. and was impacted by the yen’s appreciation, operating income increased due to “proactive cost reductions, lower parts and materials costs.”

Sharp Electronics

reported lower net sales, but higher net income for its fiscal second quarter, and it cut its fiscal year forecast. Net sales were 674.2 billion yen, down 11.6 percent compared with the prior year’s fiscal second quarter. Net income was 9.4 billion yen, 2.5 times that of the same period last year.

In its audio-visual and communications unit, sales were down 15 percent in the fiscal first half to 580.7 billion yen, compared with last year due mainly to sales of LCD TVs and lower pricing, despite an increase in unit sales.

Sharp now forecasts net sales to be 2,800 billion yen, down from the previous forecast of 3,050 billion yen. Operating income is now forecast at 85 billion yen, from the previous forecast of 97 billion yen. Net income should be the same as previously forecast, at 6 billion yen.

Samsung Electronics

reported lower net income but slightly higher revenue for its fiscal third quarter, ended Sept. 30. Revenues were 41.27 trillion Korean won on a consolidated basis, a 3 percent increase year on year and consolidated net income of 3.44 trillion won, represented a 23 percent decrease year on year.

Samsung’s mobile communications business saw revenues rise 39 percent year on year to 14.42 trillion won. Handset shipments rose more than 20 percent quarter on quarter, driven by growth in the smartphone segment where sales were up more than 40 percent quarter on quarter and 300 percent year on year. Samsung continued the global rollout of its flagship Galaxy SII, which has now sold more than 10 million units in the five months since its introduction.

Samsung’s shipments of flat-panel TVs outstripped market growth of more than 10 percent quarter on quarter, which was led by demand in emerging markets. Profitability also improved quarter on quarter as LED TV sales passed 50 percent of all Samsung LCD TVs sold for the quarter, reflecting the growing acceptance of the new technology, the company said.

LG Electronics reported a net loss for its fiscal third quarter, ended Sept. 30, due in large part to heavy equity declines in its flat-panel business operations.

However, the company said it expects to see modest sales growth in the next few months, fueled by sales of higher margined smartphones and 3DTVs. According to the third-quarter financial report, significant improvement was made in the company’s handset operations, which helped reduce LG’s operating loss over the past year.

LG reported a net loss of $366 million for the three months, ended Sept. 30, after booking a 257.9 billion won equity loss in the quarter from the LG Display unit.

Overall sales declined 4 percent to 12.9 trillion won during the quarter, from 13.43 trillion won.

LG reported selling 21.1 million handsets, down from 24.8 million units in the second quarter. The operating loss margin grew to 5.2 percent, from 1.7 percent in the second quarter. The TV business unit showed a 1.9 percent operating profit margin, up from 1.7 percent in the second quarter.

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