Breaking News, World News and Taiwan News.

Panasonic shares fall 20% after forecast of large loss

TOKYO--Shares in Panasonic dived nearly 20 percent Thursday after the Japanese firm warned of a mammoth US$9.6 billion annual loss in the latest sign of trouble for the nation's hard-hit electronics giants.

The consumer electronics firm's shares closed 19.45 percent lower at 414 yen on the Tokyo Stock Exchange after it said late Wednesday that it would report the huge loss as it undergoes a major overhaul of its troubled business.

The dramatic plunge came as rival Sharp Corp. said it would book a record US$5.6 billion yearly loss, nearly double its official forecast, and temporarily shelved dividend payments to shareholders for the first time in decades.

While Panasonic said it would achieve an operating profit, restructuring costs and write-downs would result in the 765-billion-yen shortfall, close to its record 772.2-billion-yen shortfall last fiscal year, one of the worst-ever for a Japanese firm.

The projection was a reversal of Panasonic's earlier vow to return to the black by March next year.

“The focus is on whether this is the end of restructuring-related losses,” Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management, told Dow Jones Newswires. “I think that is unlikely.”

Moody's warned that it had put Panasonic's credit rating on review for a possible downgrade after cutting its rating by two notches in September.

“The rating action reflects Moody's increasing concern that sluggish demand and intense competition will continue to pressure Panasonic's earnings and leverage,” it said in a statement Thursday.

Panasonic, like rivals Sony and Sharp, has suffered in its television business amid falling prices and stiff overseas competition, while a strong yen has also hit Japanese manufacturers.

The television business has razor-thin profit margins and Japanese firms have been unable to keep pace with competition from the likes of Apple and South Korea's Samsung Electronics, which have set the pace in the lucrative global smartphone market.

Samsung, by contrast, posted a record third-quarter profit of nearly US$6 billion, powered by strong sales of its Galaxy smartphones and display panels.

Panasonic has announced a major restructuring of its liquid crystal display manufacturing division, and is reportedly considering shifting all of its mobile phone handset production overseas because of high costs at home.

Write a Comment
CAPTCHA Code Image
Type in image code
Change the code
 Receive China Post promos
 Respond to this email
WSJA
Subscribe  |   Advertise  |   RSS Feed  |   About Us  |   Career  |   Contact Us
Sitemap  |   Top Stories  |   Taiwan  |   China  |   Business  |   Asia  |   World  |   Sports  |   Life  |   Arts & Leisure  |   Health  |   Editorial  |   Commentary
Travel  |   Movies  |   TV Listings  |   Classifieds  |   Bookstore  |   Getting Around  |   Weather  |   Guide Post  |   Student Post  |   English Courses  |   Terms of Use  |   Sitemap
  chinapost search