By Isabel Reynolds
TOKYO (Reuters) - Japan's major consumer electronics makers are expected to show April-June earnings collapsed due to the March earthquake, but focus is turning to whether they can meet their forecasts for a swift recovery, given a fragile global economy.
Average estimates show Panasonic and Sharp are expected to slide into the red for the quarter, while Nintendo is forecast to report a slender operating profit of 10 billion yen ($127 million).
Sony and Canon are also expected to report hefty falls in quarterly profits.
Most of the electronics conglomerates have forecast earnings for the year to March 2012 to stay flat or show a small decline from the previous year, underscoring expectations of strong improvement once they overcome disaster-related production difficulties.
But doubts about the prospects for the rest of the year are creeping in along with the yen's renewed rise against the dollar and the euro, which has been fueled by jitters about government debt.
"Concerns are now shifting from the supply side to the demand side," said Yoshiharu Izumi, JP Morgan analyst in Tokyo. "It's all about the macro. The strong yen is not so much of a concern, the problem is the end demand for products."
Consumers in both the United States and Europe remain gloomy and economists are cutting growth forecasts. U.S. consumer confidence hit a near 2- year low in early July, while worries about debt and government austerity measures are capping demand in many parts of Europe.
In China, a shrinking factory sector has also sparked concerns.
At home, Japan's consumer sentiment is improving slightly after being undermined by the March 11 quake and tsunami that killed at least 15,000 and set off a long-running crisis at a nuclear plant in Fukushima, north of Tokyo.
Last-minute demand for replacement televisions ahead of the end of analog broadcasting in Japan this month will also likely help Sharp, whose sales are focused on the domestic market.
Shares in most Japanese technology companies were pummeled by the quake.
he Nikkei average is down 4 percent since March 10, the day before the quake. In comparison, Canon, which has said production would be back to normal in July-September, has recovered to stand just 2.5 percent lower than the March 10 close.
Panasonic has lost 15 percent and Sharp 10 percent over the same period, but the biggest losers are Sony and Nintendo, down 28 percent and 35 percent respectively.
Both face troubles unrelated to the earthquake, with some analysts citing further unease over the possible costs of Sony's massive hacking incident earlier this year, as well as stubborn losses in its TV division.
Weaker than expected sales of Nintendo's 3DS handheld games player and doubts over the mass appeal of a successor to the Wii home console have discouraged investors in the Kyoto-based games company.
($1 = 78.865 Japanese Yen)
(Editing by Anshuman Daga)