Panasonic Loses $5.5B in Latest Quarter
October 31, 2011 11:26 AM
Panasonic's loss is the largest in a decade
The TV and electronics market around the world is still recovering. With some parts of the world slipping back into economic turmoil profits for some companies are down significantly. One of the companies that is reporting a significant loss is Panasonic. In fact, Panasonic is reporting its biggest loss in the last ten years.
Panasonic's latest quarterly earnings show that the company lost $5.5 billion. The big loss is blamed in part on restructuring costs, a yen that is soaring compared to other currency, and weak demand for TVs and other products in Europe and America. TV shipments is a very weak spot for Panasonic with major losses coming from that division.
In April of this year, Panasonic reported that it would be looking to
shed 14,000 workers
over the next two years. With a loss this massive, the paring of workers may start sooner than expected.
reports that Panasonic also notes it will stop producing LCDs at a plant it operates in Mobara in Japan near Tokyo. The massive loss has also resulted in Panasonic killing plans to ship production equipment to Shanghai where it had planned to make Plasma TVs.
"The net loss of 420 billion yen includes an increase in the cost of restructuring. It has lowered the assumed exchange rates to 76 yen, which gives the company some buffer even if the dollar slips from the current level after today's intervention," said Hiroyuki Fukunaga, CEO of Investrust. "So even though it is reporting a loss, the market may think all the negative factors have been priced in, especially given that its share price has fallen about a third from around 1,200 yen at the beginning of this year."
This is the second largest quarterly loss Panasonic has ever reported. Panasonic has reduced its expected operating profit forecast to 130 billion yen from the previous estimate of 270 billion yen. The estimate Panasonic had in place for TV sales has been cut as well from 25 million units to 19 million units.
"Game reviewers fought each other to write the most glowing coverage possible for the powerhouse Sony, MS systems. Reviewers flipped coins to see who would review the Nintendo Wii. The losers got stuck with the job." -- Andy Marken
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