Panasonic slumps to $4B annual loss
TOKYO -- Panasonic Corp. sank deep into the red last fiscal year, joining a growing list of Japanese electronics makers who have fallen victim to a stronger yen and an unprecedented slump in global demand.
The Osaka-based company Friday reported a $4 billion loss for the fiscal year ended March — its first loss in seven years — and expects to stay in the red in the current fiscal year.
Business slumped across all segments amid lackluster demand for everything from flat-screen TVs and digital cameras to home appliances and semiconductors. Sales were down 14.4% to 7.77 trillion yen, and operating profit tumbled 86% to 72.9 billion yen.
The result represents a major reversal of fortune for Panasonic, which just last year posted a record net profit of 281.9 billion yen.
But it is only the latest among a score of bellwether brands in Japan releasing grim results as the world's second-biggest economy gets booted by the recession. On Thursday, rival Sony Corp. said it lost $1 billion yen last fiscal year.
Panasonic vowed to press ahead with "drastic business structural reforms" to try to engineer a recovery. For the 12 months through March 2010, it forecasts a net loss of 195 billion yen on sales of 7 trillion yen.
President Fumio Ohtsubo has said he wants to shutter unprofitable business lines, shift resources to those with growth potential and improve product quality. The firm is closing factories and aims to cut about 5% of its 300,000-strong global work force by next spring.
"Panasonic expects that the economic environment in fiscal 2010 will be more severe than the past fiscal year, as the global recession and shrinking demand triggered by the financial crisis coincide with changes in market structure, including the expansion of emerging markets and a shift to lower-priced products," it said in a statement.
The electronics maker is also awaiting legal clearance for its $9 billion takeover of smaller Japanese rival Sanyo Electric Co. The deal would create one of the world's biggest electronics companies and enable Panasonic to add Sanyo's strengths in "green" energy technology.
Along with the foreign exchange and economic factors, the company blamed its net loss on high restructuring costs. It booked 367.4 billion yen in restructuring expenses and 92 billion yen in equity write-downs.
The company last year changed its official name from Matsushita Electric Industrial Co., shedding the name of its charismatic founder in favor of its more internationally known brand.
Panasonic reports earnings based on U.S. accounting standards.
In trading Friday, shares of Panasonic jumped 4.8% to 1,455 yen on the TokyoStock Exchange, outpacing the benchmark Nikkei 225 index's 1.9% rise. The results were released after trading closed.