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Panasonic reduces losses on sales recovery

Fri, 05/07/2010 - 8:00am
Yuri Kageyama, AP Business Writer

TOKYO (AP) – Panasonic slashed its losses for the January-March quarter to just under $1 billion as the world's biggest maker of plasma TVs benefited from a recovery in global sales.

But its president acknowledged Friday that the company had fallen short of profit goals in recent years and needed to revamp its strategy.

To turn itself around, Panasonic must shift its focus to key growth areas, such as green businesses and health care services, while moving out of unprofitable sectors over the next three years through March 2013, said President Fumio Ohtsubo.

The company also needs to become a more global company, focusing on emerging markets such as China and India, and raise its overseas sales to 55 percent from the current 48 percent, he told reporters via satellite broadcast from Osaka headquarters.

Panasonic Corp. said its loss for the fiscal fourth quarter was 88.9 billion yen ($971 million), compared with a 444.3 billion yen loss a year earlier.

Quarterly sales jumped 16 percent to 2.198 trillion yen ($24 billion).

The maker of home electronics like Viera TVs said it was carrying out cost cuts, focusing on emerging markets and banking on 3-D TVs for new growth.

It is also seeking to adapt to a global shift toward cheaper gadgets, including new strategies that it's chiseling after adding Japanese rival Sanyo Electric Co. as a subsidiary.

Sanyo's strength lies in cheaper home appliances, as well as in solar panel and battery businesses, which are expected to benefit from greater consumer enthusiasm for "green" energy-efficient technologies.

Like other Japanese electronics makers including archrival Sony Corp., Panasonic is struggling against competition from newcomers and formidable players from South Korea like Samsung Electronics Co., which leads the Japanese in flat-panel TVs.

For the fiscal year ended March 31, Panasonic's loss shrank to 103.5 billion yen from a 379 billion yen loss a year earlier. Annual sales slipped 4 percent to 7.418 trillion yen.

It is expecting to return to the black for the fiscal year through March 2011, posting a 50 billion yen profit on a 19 percent rise in sales to 8.8 trillion yen.

The company was not able to return to the black in the fiscal year ended March, partly because of restructuring costs and outlays on early retirement programs.

Panasonic has also boosted its electronics business in Europe, including refrigerators and washing machines, it said.

But it warned that future prospects remained shaky because of the possibility of a strengthening yen and intensifying global competition.

Ohtsubo said Panasonic will aim for 10 trillion yen ($109 billion) in annual sales by the fiscal year ending March 2013 – a goal it had set three years ago but failed to achieve so far.

Panasonic aims to maintain its No. 1 world market share in lithium-ion batteries, targeting 500 billion yen ($5.4 billion) in annual sales in the sector, he said.

Panasonic plans to produce 30 million flat-panel TVs in the fiscal year through March 2013, more than 11 million of that in emerging markets, and up from 15.8 million for the fiscal year ended March 31. Panasonic shares slid 2.5 percent in Tokyo to 1,310 yen.

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