Panasonic Finally Makes a Profit
Panasonic (NYSE: PC) has reported its first profit in six quarters.
Benzinga reported on May 11 that Panasonic had suffered massive losses following the natural disasters that had devastated Japan. At that time, the company reported record losses of 772.2 billion yen ($9.6 billion), which sat in stark contrast to the impressive 74 billion yen profit it reported a year ago. The losses were among the worst in Japanese manufacturing history.
Even then, Panasonic was forecasting a return to profit by March 2013, at 50 billion yen ($625 million) profit on 8.1 trillion yen ($101 billion) sales, up 3 percent. That talk sounded laughable just two months ago but, having severely cut jobs and shut down some factories, the company is ahead of schedule.
According to the Panasonic press release, "Consolidated group sales for the first quarter decreased by 6% to 1,814.5 billion yen due mainly to weak demand for AV products in Japan, compared with 1,929.5 billion yen for the first quarter of the year ended March 31, 2012 (fiscal 2012). Of the consolidated group total, domestic sales amounted to 922.1 billion yen, down by 5% from 967.6 billion yen a year ago. Overseas sales decreased by 7% to 892.4 billion yen from 961.9 billion yen a year ago."
Net income is 12.81 billion yen, or $164 million, for the quarter, compared with a 30.4 billion yen loss the previous year. Panasonic said that, "Operating profit increased to 38.6 billion yen from 5.6 billion yen a year ago, while pre-tax income and net income attributable to Panasonic Corporation increased to 37.8 billion yen and 12.8 billion yen from a loss of 17.4 billion yen and a loss of 30.4 billion yen, respectively. Despite sales decline and yen appreciation, these results were due mainly to fixed cost reductions and streamlining of material costs."
The company itself is admitting that it was only able to report a profit because of the restructuring, but in this climate a profit is a profit. Naturally, Panasonic will need to do something about its weak sales figures if it wants to remain in the black.
On Tuesday morning Panasonic traded at about $6.70, down roughly 2 percent.
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