Japan's Panasonic, Sharp point to better times ahead
February 5, 2014, 12:14 am TWN
TOKYO--Japan's Panasonic and Sharp on Tuesday pointed to better times ahead as earnings improved thanks to an overhaul of their businesses and the yen's decline, but the recovery was held back by weak sales of consumer gadgets.
The nine-month results comes as the country's electronics giants, including Sony, undergo painful restructurings aimed at stemming years of record losses.
The country's struggling electronics sector has faced serious challenges in recent years, with television sales plunging while foreign rivals such as Apple and Samsung surging past them in the lucrative smartphone market.
Digital camera makers have also suffered as the move to smartphones has sent hammered demand for point-and-shoot offerings.
On Tuesday, Panasonic said it swung back into the black with a nine-month net profit of US$2.4 billion due to cost cutting, buoyant sales in its auto division including GPS navigation products, and the yen's fall over the past year.
The 243.0 billion yen net profit between April and December reversed a net loss of 623.8 billion yen over the same period a year ago, while sales came in at 5.68 trillion yen, a rise of 4.4 percent, it added.
Panasonic — recovering from combined losses topping US$15 billion in the past two fiscal years — expects to earn 100 billion yen in net profit for the year to March.
But sales of household appliances and digital consumer products, including its struggling television business, remained weak as the company shifts its attention away from loss-making divisions as part of a wider restructuring.
"Sales of digital consumer products decreased while focusing on profitability rather than sales volume," it said in a statement.
Panasonic has said it will abandon the consumer smartphone market and stop production of plasma television screens, in line with a broader industry shift away from plasma units. Hitachi and Pioneer have also exited the market in recent years.
Sharp, maker of Aquos-brand electronics, said it booked a 17.7 billion yen net profit in the April-December period, reversing a net loss of 424.3 billion yen a year earlier.
Sales jumped 21 percent on brisk demand for panels, including its popular "IGZO" displays for mobile phones, it said.
The firm added that it had also made big cuts in labor costs and capital investment.