This year looks set to be a grim one for Japanese electronics giant Panasonic, which expects 780 billion (US$10 billion) net loss for fiscal 2012 and other downward revisions for its sales and profit forecasts.
The US$10 billion loss is nearly double its previous forecast of 420 billion yen (US$5.5 billion), according to the company's statement Friday. Sales forecast for fiscal 2012 was revised from 8,300 billion yen (US$108.9 billion) to 8,000 billion yen (US$104.9 billion) due to "significant sales declines in many digital products", while operating profit was expected to be 30 billion yen (US$393.6 million) from the previous forecast of 130 billion yen (US$1.7 billion).
Panasonic attributed the sales decline to the global economic slowdown and financial instability due to the European debt crisis, extensive supply chain disruption from the Thailand floods in October last year, and a strong yen.
Aside from these factors, Panasonic's restructuring expenses and its 2009 acquisition of Sanyo, for which it faced a 250 billion yen (US$3.2 billion) goodwill writedown, also contributed to the company's losses.
"Although the company carried out streamlining efforts rigorously in this extreme situation, it is not expected that the company will be able to offset the decline in sales," it said.
Panasonic's consolidated group sales for the third quarter, ended Dec. 31, 2011, dropped 14 percent to 1,960 billion yen (US$25.7 billion), compared to 2,285 billion yen (US$29.9 billion) a year ago. And although the company pursued a streamlining program to reduce material and fixed costs, operating loss was 8.1 billion yen (US$106.2 million), compared with a profit of 95.3 billion yen (US$1.25 billion) a year ago, it added.
Panasonic President Fumio Ohtsubo apologized for the record loss forecast at a Tokyo press briefing, Reuters reported Friday. "I feel the responsibility for the huge amount," he said. "We will accelerate our profit structure reform and make sure we achieve a V-shaped performance improvement in the next business year."
Reuters noted that Ohtsubo made no indication he would step down from his role--something which took place recently at Sony, another beleaguered Japanese electronics powerhouse battling waning sales and intense competition from rivals.
A separate report by Bloomberg said Panasonic, Sony and Sharp expect to have a combined loss of US$17 billion this year. In a sign that the once-robust Japanese electronics market was being crushed by foreign rivals such as Korean giant Samsung Electronics, the predicted loss was less than the US$22 billion Samsung said it planned to invest in capital expenditures, the news wire added.
In a previous report by ZDNet Asia senior analyst Ken Hyers from Technology Business Research said Samsung's strategy had been "working well", creating a strong portfolio of products that are riding the growth wave of smartphones and smart TVs.