Japan's Matsushita suffers 22 percent slump in profits in June quarter

TOKYO (AFP) Jul 30, 2003
Japan's Matsushita said Wednesday its net profit in the June quarter plunged 22.2 percent from a year ago to 2.7 billion yenmillion dollars) due to tax charges, while falling prices ate into sales.

At the same time its pre-tax profit jumped 45.6 percent in the three months to June to 25.2 billion yen on strong demand for flat screen televisions, DVD recorders and other digital audio and visual devices.

Matsushita Electric Industrial Co. Ltd., better known through its Panasonic and National brands, said its revenue sank 1.7 percent to 1.76 trillion yen.

"The number of products we sold rose but their total monetary value fell because of the ongoing fall in prices," said Tetsuya Kawakami, a company board member in charge of finance and accounting.

"I believe the most significant problem facing the electronics industry is the reduction of prices," he told a news conference.

Domestic sales grew two percent in April-June to 825.1 billion yen thanks to the popularity of a range of digital devices, but revenue from overseas sank four percent to 938.5 billion yen.

"In the United States, sales of household appliances fell because of weak consumption," said Kawakami.

In contrast, "the Chinese market remained very strong."

Sales of mobile phone handsets, especially in China and Europe, were very healthy over the quarter.

"But we are expecting the second quarter (to September) to be a little tougher with the European market remaining uncertain," Kawakami warned.

The incorporation of subsidiary Victor Co. of Japan Ltd. (JVC) -- a video recorder maker -- cost Matsushita extra money in taxes, which pushed down its profits on a net basis, a spokesman said.

The firm left its earnings forecast for the full year to March 2004 unaltered from an April prediction. It expects a net profit of 30 billion yen, a pre-tax profit of 120 billion yen and revenue of 7.45 trillion yen.

"We kept our forecast unchanged because the figures we saw in the first quarter came out roughly as we expected," explained Kawakami.

"We currently do not see a major reason to revise our future outlook."

The results, released before the Tokyo Stock Exchange closed, were taken as a further sign Japan's technology industry remained in trouble, dealers said.

Shares in Matsushita plunged 5.37 percent or 80 yen to 1,410, outpacing a decline in the Nikkei-225 average, which lost 2.05 percent to 9,632.66 points.

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