Panasonic Profit Surges on One-Time Pension Account Gain

Panasonic Corp., Japan’s biggest consumer electronics maker, posted first-quarter profit that outstripped analyst estimates, boosted by a one-time gain from changes in pension accounting and cost cuts.

Net income rose more than eight-fold to 107.8 billion yen ($1.1 billion) in the three months ended June from 12.8 billion yen a year earlier, the Osaka-based company said after the market closed in Tokyo yesterday. That beat the 14 billion yen median of five analysts’ estimates obtained by Bloomberg News. The pension gain was 79.8 billion yen.

The maker of Viera televisions is headed for its first annual profit in three years as President Kazuhiro Tsuga restructures to end losses in TVs, semiconductors and mobile phones. It’s “reconsidering” how to sustain the handset unit, Chief Financial Officer Hideaki Kawai said yesterday.

“The worst is over but it’s way too early to say whether the key businesses are recovering,” Yoshihiro Nakatani, a fund manager at Asahi Life Asset Management Co. in Tokyo said yesterday. “Without a recovery in electronics and appliances, it’s too early to be positive on the company.”

A weaker yen, triggered by Japanese Prime Minister Shinzo Abe’s monetary stimulus, is boosting overseas earnings. Operating profit, or sales minus the cost of goods sold and administrative expenses, grew 66 percent to 64.2 billion yen in the quarter. That result, which excludes the pension gain, beat the 45 billion yen median of nine analyst estimates obtained by Bloomberg News. Sales rose 0.6 percent to 1.8 trillion yen.

Mobile Business

Panasonic rose 3.5 percent to 881 yen as of 9:13 a.m. in Tokyo trading, the biggest rise in almost a month. The stock has gained 69 percent this year, more than double the 32 percent rise in the benchmark Topix index.

The mobile phone business provides an example of the kind of problem Tsuga must fix. The unit’s operating loss totaled 5.4 billion yen in the quarter, wider than the 3.7 billion yen loss of a year earlier.

“We still need more time to decide how to reform the operation,” and options include expanding into business-use, CFO Kawai said yesterday. He declined to say whether its options include ending consumer handset operations.

The company is already working its way through reviewing other businesses. Last week, it agreed to sell its ultrasound diagnostic equipment operations to Konica Minolta Inc.

Panasonic is also seeking a sale of its stake in a health-care unit. In June, the electronics maker selected KKR & Co. and Toshiba Corp. on a shortlist for second-round bids after receiving offers that valued the division at about 200 billion yen, people with the knowledge of the matter said at the time.

Segment Earnings

Earnings from the appliances segment of the business, including refrigerators and air conditioners, fell 39 percent to 12.7 billion yen. Elsewhere, profit at its Eco Solutions unit -- comprising businesses like solar energy operations -- surged to 16.1 billion yen from 3.6 billion yen a year earlier.

Panasonic, the world’s No.4 TV maker in 2012, wasn’t among the top five makers of flat-panel TVs during the March quarter, according to researcher DisplaySearch. China’s TCL Corp. ranked third, trailing Samsung Electronics Co. and LG Electronics Inc.

The company also didn’t rank among top five in the mobile-phone market during the June quarter, according to IDC.

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