Tokyo - Japan’s top electronics firms reported mixed earnings yesterday, with Sony slashing its full-year profit outlook while hard-hit Panasonic turned in strong earnings and boosted its annual forecast.
The companies have undergone painful restructuring to stem years of losses as they struggle to keep up in the low-margin television business, while rivals including US-based Apple and South Korea’s Samsung surge ahead in the lucrative smartphone sector.
Once world-beating Sony booked a net loss of ¥15.8 billion (R1.6bn) in the half-year to September and cut its forecast for the full year by 40 percent, blaming dwindling sales of digital cameras, personal computers and televisions.
However, that was still an improvement on the ¥40.1bn loss it made in the same period last year. The country’s digital camera makers have suffered as consumers increasingly turn to smartphones to snap pictures, while Sony also said that its film business had turned in a weaker-than-expected performance.
Company chief Kazuo Hirai has shrugged off pleas to abandon the television unit altogether, while the firm has also turned down a call by US hedge fund boss Daniel Loeb to spin off 20 percent of its entertainment arm to boost profits.
Last month Hirai reaffirmed his plan to keep the entertainment business, calling it “a very vital part of Sony’s overall strategy. It is one of the key pillars of our future growth.”
Sony is banking on strong holiday sales of its PlayStation 4 games console as rivals Nintendo and Microsoft also jockey for control of a sector worth $44bn (R438bn) annually.
Panasonic, in contrast, said dramatic corporate overhauls and a sharply weaker yen – which makes exporters’ goods cheaper overseas – were key factors in helping it crawl back from the abyss after several quarters of swingeing losses.
The firm said it had swung back to profit for the six months to September and doubled its full-year forecast – after combined losses topping $15bn in the past two fiscal years. The company said it earned a ¥169.3bn net profit in the first half, reversing a net loss of ¥685.2bn a year earlier. Panasonic also said it was on track to earn a ¥100bn net profit in the year to March.
However, Koki Shiraishi, an analyst at SMBC Nikko Securities in Tokyo, warned: “The impact of a weak yen will start disappearing in the second half of the fiscal year, which will cut their profit.”
He added: “There are still tough times ahead for Japanese electronics makers.”
Panasonic also said it would abandon the consumer smartphone market as it struggled with the tough competition.
Its announcement came a day after rival NEC said it had slipped into a loss owing to costs tied to its own exit from the business.
Sharp said its first-half net loss shrank dramatically to $44m on the back of strong demand for its liquid-crystal display panels used in smartphones and tablet computers. - Sapa-AFP