Panasonic back in black on cost reduction

Panasonic's operating profit for the first quarter increased 6.9 times compared with last year and net income swung back to black--due to fixed cost reductions and the streamlining of material costs.

In a statement Tuesday, the Japanese electronics released its financial results for the three months ended June. The company's operating profit increased to 38.6 billion yen (US$492.9 million) from 5.6 billion yen (US$71.5 million) a year ago, it said.

Its pre-tax income and net income returned to positive territory from a loss of 17.4 billion yen (US$222.2 million) and a loss of 30.4 billion yen (US$388.2 million) respectively a year ago to reach 37.8 billion yen (US$482.7 million) and 12.8 billion yen (US$163.5 million) this quarter.

The Japanese tech company attributed the positive results to savings from fixed cost reductions and the streamlining of material costs despite the decline in sales and yen appreciation.

Panasonic reported a decline of 6 percent in consolidated group sales to 1.81 trillion yen (US$23.2 billion) from 1.93 trillion yen (US$24.6 billion) which was attributed to the weak demand for audio-visual (AV) products in Japan.

Despite the decline in sales, Panasonic said its forecast for the fiscal year 2013 remains the same as the one announced on May 11, 2012. The company had predicted a 495 percent increase in operating profit to 260 billion yen (US$3.3 billion) compared to the fiscal year 2013 while sales were forecasted to reach 8.1 trillion yen (US$103.4 billion), a 3 percent year-on-year jump.

The company also forecasted pre-tax income of 160 billion yen (US$2 billion) and net income of 50 billion yen (US$638.5 million) for the fiscal year 2013, unchanged from fiscal year 2012.