Panasonic on Friday nearly doubled its projected net loss for the fiscal year to a record 780 billion yen ($10.2 billion) amid weak TV and mobile phone sales and ongoing restructuring costs after acquiring smaller Sanyo Electronics Co.
Panasonic joins Sony and Sharp as the latest major Japanese electronics maker to predict huge losses for the year through March. That reflects the battering these brand name companies have taken from the yen's surge, a weak global economy, last year's tsunami disaster as well as flooding in Thailand, which disrupted supply networks.
For the October-December quarter, Panasonic reported a net loss of 197.6 billion yen ($2.6 billion). A year earlier, it had a net profit of 40 billion yen for the same quarter.
Panasonic is streamlining its businesses and cutting jobs after acquiring Sanyo, which was strong in the solar power and rechargeable battery businesses. But some Panasonic and Sanyo products, including refrigerators and washing machines, overlap.
The larger projected annual net loss was linked largely to restructuring costs, from early retirement packages to impairment losses of fixed assets, it said.
So far, Panasonic's worst annual loss totaled 427.7 billion yen for the year through March 2002, when it was still Matsushita Electric Industrial Co.
Like both Sony and Sharp, Osaka-based Panasonic has struggled in its flat panel TV business. All three face intense competition from South Korea's Samsung Electronics Corp. and others.
Panasonic said that despite favorable sales of personal computers, sales of TVs and mobile phones declined.
The company's quarterly sales fell 14 percent to 1.96 trillion yen, it said in a release.
The yen's strength against the dollar and euro, which erodes foreign earned income when repatriated to Japan, also hurt Panasonic, which gets just under half its sales from outside the country.
Rival Sony Corp. on Thursday predicted a net loss of 220 billion yen ($2.9 billion) for the year through March, much bigger than an earlier forecast of 90 billion yen.
A day earlier, Sharp Corp. said it expected to lose 290 billion yen for the fiscal year.
Last month, Moody's Investors Service lowered its credit ratings one notch for both Panasonic and Sony amid pressure on their TV businesses.
Moody's said Panasonic's financial strength has deteriorated since it acquired the remaining stakes in Sanyo Electric Co. and Panasonic Electric Works Co. Its debt rating was lowered to A2 from A1, while Sony's credit was cut to Baa1 from A3.