Panasonic Raises Forecast as Global Economy Improves

Panasonic Corp., the world’s largest maker of plasma televisions, raised its earnings forecast for the fiscal first half, citing a stabilizing global economy, increased savings and a more favorable currency exchange rate.

The net loss in the six months ending Sept. 30 will probably be 100 billion yen ($1.06 billion) while sales may total 3.3 trillion yen, the Osaka-based company said today. Panasonic earlier projected the shortfall at 195 billion yen and revenue of 3.26 trillion yen.

Demand is recovering following the implementation of economic stimulus packages by governments worldwide, while reductions in fixed costs are helping to boost profit, Panasonic said. It cited continued economic uncertainty for leaving its annual targets unchanged.

The first-half operating loss, or sales minus the cost of goods sold and administrative expenses, will probably be 20 billion yen, narrower than the 105 billion yen forecast in May, Panasonic said.

“Concern over losses getting bigger at Japanese electronic makers is over,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo, who declines to disclose the amount of assets he oversees. “What I want to see is whether revenue grows because what they’ve been doing up to now is cutting costs.”

Panasonic rose 0.1 percent to close at 1,502 yen in Tokyo trading before the results were announced, extending its gain this year to 35 percent. Japan’s benchmark Nikkei 225 Stock Average was little changed.

First-Quarter Loss

The maker of Viera TVs posted a third straight quarterly loss after the global recession eroded its earnings from TVs and components.

The net loss was 53 billion yen in the three months ended June 30, compared with profit of 73 billion yen a year earlier, Panasonic said. The deficit was smaller than the median 77.5 billion yen shortfall estimate of six analysts surveyed by Bloomberg News.

First-quarter sales fell 26 percent to 1.6 trillion yen. The operating loss was 20.2 billion yen, compared to a profit of 109.6 billion yen a year earlier. Analysts estimated a 55 billion yen loss.

The consumer-electronics division, the company’s biggest by revenue, had a loss of 13.6 billion yen, compared to a profit of 55 billion yen a year earlier, as sales of audio-visual equipment including flat-panel TVs and digital cameras slumped 23 percent. Panasonic’s components unit also had a deficit of 11.5 billion yen, compared to a profit of 19.5 billion yen last year.

12% Market Share

Panasonic in May said it aims to win 12 percent of global market share for its flat-panel TVs by raising sales volume by 54 percent. The company projected selling 7.75 million plasma sets and the same number of LCD models in the year ending March 2010, compared to 5.57 million and 4.47 units respectively sold last fiscal year.

The company dropped to fifth from fourth place in terms of global TV market share in the three months ended March 31 the previous quarter, Austin, Texas-based researcher DisplaySearch said in May. Shipments of plasma sets rose 1 percent in the quarter from a year earlier, while those of liquid-crystal- display models rose 27 percent.

Panasonic is forecasting a second annual loss and the lowest annual revenue in 14 years as it and rivals cut prices of TVs, cameras and audio equipment to cope with the global recession. The company is eliminating 15,000 jobs and shutting about 20 factories this year to save at least 135 billion yen.

Annual Forecast Maintained

The consumer-electronics maker, whose products include flat- screen TVs, computers and refrigerators, kept unchanged its May forecast of a 195 billion yen net loss for the 12 months ending March 31. The company also maintained its projection for full- year operating profit at 75 billion yen and its sales at 7 trillion yen.

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