Put together falling customer demand, a bad deal with Sanyo and appreciation of yen, you have Panasonic Corporation expecting to run losses for one whole year. The company says that for the financial year ending March 31, 2012, its pre-tax loss will be 430 billion yen (£3.44bn) instead of a pre-tax profit of 100 billion yen (£799m).
The Japanese company’s financial result said that the company revised its previous sales forecast of 8,700 billion yen downward to 8,300 billion yen due primarily to the sluggish overseas sales affected by ever-intensified price competition for digital products and the appreciation of the yen.
The company’s attempt to deal with the global economic downturn, Panasonic aimed at a wide reorganization for spurring profits and becoming the No.1 green innovation company in electronics industry by 2018. But it seems there won’t be any progress until next.
Tellies and white goods are not doing well in the scenario of the global economic downturn and Japanese firms are in a difficult position in the electronic sector.
Panasonic’s merger with Sanyo did harm the company’s financial interest, with the losses of the latter pulling down the profit of the former. Sanyo finally became a wholly owned subsidiary in April 2011, and in three months to the end of September, it made a loss of 26.9 billion yen. Panasonic said that sales of electronic components, digital cameras, TVs and in-car-related equipments were sluggish.
The ‘digital AVC networks’ segment of its business, which includes flat-panel TVs and mobile phones, is also hurting the company’s bottom line this quarter, with a loss of 18.1 billion yen.
And as the yen strengthens, Japanese companies are having a hard time competing with its Chinese and Korean counterparts.