Panasonic warned today that will record in the current fiscal year a loss of nearly $10 billion for the second consecutive year. Japanese leaders dramatically revised their initial estimates after the company originally anticipated tax return, writes Financial Times.
The announcement highlights the persistent problems faced by Japanese manufacturers of consumer electronics.
The company announced that for the fiscal year which ends in March expected a net loss of 765 billion yen ($9.6 billion), dramatically reversing a previous estimate, for a profit of 50 billion yen ($627 million). Panasonic said it will not pay dividends this year, for the first time since 1950.
Huge losses this year will be nearly equal to the record deficit of 772 billion yen ($9.7 billion) suffered last year, and losses in the last five years will reach nearly 2,000 billion yen ($25.11 billion).
The company revealed that it revises down the value of an old investment in solar panels, lithium-ion batteries and cell phones, areas that Panasonic relied on for a recovery, but was overwhelmed by competing companies that came on the market with lower prices and more innovative products.
Panasonic also reduced by 10% its estimates of annual sales to 7.300 billion yen ($91 billion) and the operating profit by nearly 50%, to 140 billion yen ($1.75 billion).
Panasonic Corporation is a Japanese multinational company with headquarters in Osaka, Japan, that manufactures electronics, non-electronic products and provides home renovation services. Panasonic is one of the largest manufacturers of TV sets and is in the top 20 of the semiconductor vendors.
Other Japanese consumer electronics manufacturers have also problems of competitiveness, as the price of products such as flat screens for televisions decreased significantly.
High production costs in Japan, boosted by yen appreciation, gave a decisive advantage to competing manufacturers from South Korea and China.
Sony and Sharp, which recorded losses last year could also be forced to reduce their annual estimates.
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