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Panasonic losses balloon to £5.4bn
Panasonic posted a bigger-than-expected Q2 loss
Panasonic's losses ballooned to 698 billion yen (£5.4 billion) in the second quarter as sales of flat-panel TVs, laptops and other gadgets plunged, and restructuring costs prove bigger than initially expected.
The figures proved far worse than the 105.8 billion yen (£827 million) loss racked up for the July-September period last year.
The Osaka-based maker of Viera TVs and Lumix digital cameras revised its full-year forecast from an earlier projection of a 50 billion yen (£391 million) profit to a massive annual loss of 765 billion yen (£6 billion).
Panasonic sank to a record loss of 772.2 billion yen (£6.04 billion) for the year to March 2012 - among the biggest in Japan's manufacturing history.
Its problems are emblematic of the overall Japanese electronics industry. Panasonic's rival Sony racked up a record annual loss of 457 billion yen (£3.6 billion) in its fourth straight year of red ink.
Panasonic's quarterly sales sank 12% to 1.82 trillion yen (£14.2 billion) as a global slowdown, the falling price of electronics products and competition from cheaper Asian makers chipped away at sales. Sales in Japan dipped 11%, while overseas sales shrank 14%.
Panasonic has been trying to expand operations which cater to other businesses, instead of consumers, by beefing up its solar panel and battery divisions, including car batteries. But such shifts are expected to take some time, and those sectors have also been hit by price declines.
Panasonic lowered its sales forecast for the full year to March 2013 to 7.3 trillion yen (£57 billion), down from an earlier 8.1 trillion yen (£63 billion). Even the more pessimistic figure falls short of last year's sales at 7.85 trillion yen (£61 billion).
The company also said it expects to book restructuring expenses of 440 billion yen (£3.4 billion) for the year, bigger than the originally estimated 41 billion yen (£320 million).
Panasonic said it will boost the efficiency of its operations by merging three group companies focusing on mobile phones and network systems.