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Panasonic Profit Misses Estimates as TV Sales Drop

Panasonic Profit Misses Estimates as TV Sales Drop
Customers look at Panasonic Corp.'s 3- D televisions at an electronics store in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg

Panasonic Corp., the world’s largest maker of plasma televisions, reported profit that missed analysts’ estimates after falling prices extended losses at the main TV operations.

Net income rose 24 percent to 40 billion yen ($491 million) in the third-quarter ended Dec. 31, the Osaka-based company said in a statement today. That missed the 44.7 billion yen average of four analyst estimates compiled by Bloomberg. Operating profit unexpectedly fell.

The company will probably fail to meet a goal of turning TVs profitable in the six months ending March 31, Chief Financial Officer Makoto Uenoyama said, citing a strong yen and falling prices. Panasonic joined Samsung Electronics Co. and LG Electronics Inc. in posting deteriorating results from their TV divisions in the past quarter as competition intensified.

Third-quarter operating profit, or sales minus the cost of goods sold and administrative expenses, declined 5.6 percent to 95.3 billion yen, missing the 105.5 billion yen average analyst estimate. The company kept its full-year earnings forecasts unchanged.

Panasonic rose 0.1 percent to close at 1,126 yen in Tokyo trading before the results were announced, while Japan’s benchmark Nikkei 225 Stock Average rose 1.8 percent.

Panasonic said it plans to sell as much as 500 billion yen of bonds to refinance short-term debt.

Third-quarter profit at the main audio-visual product division fell 1 percent to 39.9 billion yen as sales of plasma TVs dropped 13 percent. Income from the components division tumbled 81 percent on lower demand for chips used in computers, TVs and cameras.

TV Sales

The world’s No. 4 TV maker sold 6.38 million sets during the quarter, up 28 percent from a year earlier. The company kept unchanged its projection to sell 21 million flat-panel models this fiscal year, including 1 million 3-D models.

Panasonic is shifting plasma-display panel facilities from Japan to Shanghai as part of its effort to turn around the money-losing TV operations. Yoshiiku Miyata, the head of Panasonic’s TV business said in August TVs may turn profitable in the six months to March 2011.

Profit at the home-appliance business rose 4 percent to 32.8 billion yen.

Sanyo Electric Co., bought by Panasonic last year, yesterday said its net loss widened 25 percent to 9.2 billion yen in the quarter because of falling prices of batteries and cameras. Revenue slid 12 percent.

Panasonic Electric Works Co., which makes lighting systems, electrical wiring fittings and electronic materials, said earlier this week quarterly net income rose 69 percent to 11.7 billion yen.

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