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Panasonic Posts $4B Loss, 14% Sales Drop

Osaka, Japan — Panasonic reported a $3.97 billion (378.96 billion yen) net loss and a 14 percent drop in sales to $81.3 billion (7,765.5 billion yen) for its fiscal year, ended March 31, and projected another loss this year.

Following bleak fiscal-year reports from SonySanyo, Toshiba, Hitachi and Pioneer in recent days, Panasonic followed a familiar pattern, citing the worldwide recession, the sharp appreciation of the yen and intensified price competition as three major reasons for its disappointing performance.

Sales in its digital AVC networks unit dropped 13 percent, with sales of video and audio equipment down 6 percent from the prior year, mainly due to sluggish sales of plasma TVs and digital cameras. In information and communications equipment, weak sales of automotive electronics led to a 19 percent decrease in overall sales from a year ago.

Home appliances sales were down 9 percent, mainly due to a sales decline in air conditioners and compressors. The company’s PEW and PanaHome unit was down 9 percent due in part to the rapid deterioration in the housing market after September 2008, Panasonic said. And in components and devices, sales were down 21 percent compared with the prior year.

Panasonic is projecting consolidated sales of $73.3 billion (7,000 billion yen) and a net loss of $2.04 billion (195 billion yen) for fiscal year 2010 ending March 31, 2010.

Panasonic “expects to encounter severe conditions because two trends are developing simultaneously. One is the world recession and shrinking demand, and the other is the changes in market structure such as expanding emerging markets and a demand shift to lower-priced products. Under these environments, the company will rebuild its management structure thoroughly, as well as make preparations for the next phase of development and growth simultaneously, aiming to be in a strong position when the market recovers.”