Japan’s Panasonic Corp is set to book a $3.9 billion annual net loss -- its first such loss in six years -- on restructuring costs amid shrinking demand, a source with knowledge of the matter said on Monday.
A net loss for Panasonic would follow warnings of red ink from Sony Corp, Hitachi Ltd and other rival Japanese electronics makers, hit by the global recession as well as a strong yen that cuts into their earnings generated overseas.
“Panasonic has an excellent cost-cutting abilities and was seen as healthier than rivals even in the downturn,” Mizuho Investors Securities analyst Nobuo Kurahashi said. “But its second-half alone will be in the red, and that would be negative.” But he added that restructuring costs were not necessarily bad. “If we can see the company acting swiftly when others are falling into big losses, it’s not bad news.”
The source, who spoke on condition of anonymity because the information is not yet public, confirmed a report by the Yomiuri newspaper that Panasonic was facing a loss of ¥350 billion for the current business year ending in March.
The company in November forecast a net profit of ¥30 billion, which was revised down from its previous projection of a ¥310 billion profit. It posted a net profit of ¥282 billion in the last business year. Panasonic, formally known as Matsushita Electric Industrial Co, said in a statement it did not announce the reported figure and will disclose its Q3 results on February 4, which may or may not include a revision to its earnings forecast.
The Nikkei business daily also reported that Panasonic’s operating profit will plunge about 90% to ¥70 billion this business year. The company has forecast a ¥340 billion operating profit, down 35% from a year earlier. Shares in Panasonic fell 3.6% to ¥1,060, underperforming a 1.6% decline in the benchmark Nikkei average. (Reuters)