Panasonic Tips Biggest Loss In 10 Years $5.4 Billion

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Panasonic has reported a potential $5.4 billion dollar loss which will be its biggest annual loss in 10 years.

Panasonic has reported a potential $5.4 billion dollar loss which will be its biggest annual loss in 10 years.

12 months ago the Japanese Company aquired Sanyo and in recent weeks the Company announced a major restructuring of their  TV and chip operations.

The full-year loss was tipped to be $3.4 Billion for the 12 months ending March 31.

Japan’s biggest maker of appliances cut its annual TV sales target to 19 million from 25 million amid competition from Samsung and LG.

Analysts claim that the Company who has already cut staff numbers in Australia is planning to eliminate an additional 17,000 jobs and focus on solar panels and rechargeable batteries after acquiring Sanyo Electric.

“Panasonic is having a really hard time because the company has to work on two restructuring plans at the same time,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo. “One is Sanyo and another one is downsizingtheir TV business.”

Bloomberg reported that Panasonic shares in Tokyo have declined 30 percent this year, compared with a 2 percent advance for Samsung and a 43 percent drop for Sony.

A big contributor to Panasonic’s loss is the high value of the Japanese Yen.

Japan’s currency today dropped from a post-World War II record against the dollar after the country intervened in the currency markets. A stronger yen hurts the repatriated value of sales overseas.

Separately, Panasonic announced a reform plan for its TV and chip operations. The company is suspending two Japanese plants making TV displays, scrapping plans to relocate panel facilities to China and writing off some value of plants making TV displays and semiconductors.

The company also will reduce its production capacity for plasma TV panels by 48 percent.

“We’ve sought measures to solve deficits at the TV unit since 2008 but none brought a result that we anticipated,” President Fumio Ohtsubo told reporters in Tokyo.

Buying Sanyo
The company also will shift its procurement base to Singapore from Osaka, it said.

The maker of Viera TV was affected by floods in Thailand just months after restarting domestic plants crippled by Japan’s magnitude-9 temblor on March 11.

Panasonic, which spent more than $6 billion purchasing stakes in Sanyo and Panasonic Electric Works Co. last year, wants energy-related businesses to be its next earnings driver after its TV operation recorded three consecutive annual losses.

Panasonic will speed up its plan to reduce group employment to a maximum of 350,000, the company said in a statement today. It also aims to make a profit from its TV and chips businesses next fiscal year, Ohtsubo said.
Income at the main audio-visual unit likely will total 36 billion yen this fiscal year, while profit at the home-appliance unit may be 104 billion yen, the company said without providing year-earlier numbers.
The Sanyo Electric unit may record a loss of 69 billion yen, it said.

Panasonic is eliminating overlapping operations in white goods and car navigation systems, consolidating marketing and research units and cutting its number of plants by as much as 20 percent from about 350, Ohtsubo said in April.

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