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Matsushita CE Sales Climb 4%

Osaka, Japan — Although sales of audio and video equipment increased 4 percent in the fiscal third quarter at Matsushita Electric Industrial, overall sales in the company’s AVC Networks, mainly consumer electronics and mobile phones, dropped 5 percent.

The CE share of third-quarter business at AVC Networks hit $4.6 billion, up from $4.4 billion in the same quarter in 2003, due mainly to strong sales of digital A/V products such as flat-panel TVs, including PDP TVs, and digital cameras. Sales of information and communications equipment, which teams with CE to make up AVC Networks, declined 12 percent in the third quarter, ended Dec. 31, to $4.7 billion from $5.3 billion the previous year. The company suffered sales declines in cellular phones and other products, although increased sales were recorded for PCs and peripherals.

Sales for Matsushita’s overall AVC Networks unit for the three months were $9.3 billion, down from $9.7 billion. The division registered lower profit in the third quarter, as global competition and lowered pricing took its toll. Profit dropped 23 percent to $247 million from a year-ago $321.7 million.

For the nine months, AVC Networks CE business rose 7 percent, reaching $11.6 billion from $10.8 billion a year earlier. The mobile phone and computer area dipped 7 percent to $14.5 billion from $15.4 billion year-over-year. Overall AVC Networks sales for the nine months edged downward 1 percent to $26.1 billion from $26.2 billion.

Nine-month AVC Networks profit managed a 2 percent gain to $904 million from $879.1 million in 2003.

Overseas sales of CE products were about flat with 2003 in the third quarter, coming in at $3.1 billion. Mobile product overseas sales slid 11 percent to $2.5 billion.

For the nine months, year-on-year, CE overseas sales rose 4 percent to $7.9 billion, while mobile overseas sales decreased 6 percent to $7.6 billion.

Consolidated third-quarter Matsushita sales, boosted by gains in digital A/V products, jumped 13 percent, hitting $22.1 billion from $19.5 billion in the same three months the previous year.

Negative factors, such as a strong yen, increased raw materials costs and intensified global price competition were more than offset by sales gains, cost reduction efforts and other positive factors. This earnings environment led to a 24 percent gain in consolidated operating income, to $849 million from a year-earlier $679.3 million. Net income soared 47 percent in the third quarter, reaching $342 million from $232.2 million.

For the nine months, consolidated Matsushita sales increased 17 percent, hitting $63.6 billion from $54.3 million the previous year. Operating income jumped 62 percent to $2.4 billion from $1.4 billion, while net income came in at $882 million, nearly double the $453.8 million registered in 2003.