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Matsushita Reports First Quarter Net Profit Increase
Strong sales of digital products led to favorable first quarter results
Consolidated group sales for the first quarter decreased 4% to 2,152.0 billion yen, from 2,239.5 billion yen in the same three-month period a year ago. Explaining the first quarter results, although sales gains were recorded mainly in digital AV products, total sales declined because sales of JVC (Victor Company of Japan, Ltd. and its subsidiaries)1 were included in the consolidated group sales in the previous year's comparable period. Of the consolidated group total, domestic sales decreased 3%, to 1,045.2 billion yen, from 1,078.0 billion yen a year ago. Overseas sales decreased 5%, to 1,106.8 billion yen, from 1,161.5 billion yen in the first quarter of the previous year.
In the electronics industry during the first quarter under review, while there was a growing demand before the Beijing Olympics, severe business conditions continued in Japan and overseas, due mainly to price declines centered on digital products, a stronger yen against the U.S. dollar and rising prices for raw materials and energy. Under these circumstances, in fiscal 2009 as the middle year of the three-year mid-term management plan GP3, Matsushita is striving to produce successful results and create a new trend for achieving goals. Aiming at getting growth back on track and strengthening profitability, Matsushita is implementing initiatives focused on four major themes: double-digit growth in overseas sales, expansion of four strategic businesses, manufacturing innovation and the "eco ideas" strategy.
Regarding earnings, operating profit2 for the first quarter was up 48%, to 109.6 billion yen, from 73.9 billion yen in the same period a year ago. Despite the negative effects of intensified global price competition and a stronger yen against the U.S. dollar, as well as rising prices for crude oil and other raw materials, this improvement was due primarily to sales gains in real terms excluding the effects of JVC, and comprehensive cost reduction activities including materials costs and fixed costs. These and other factors resulted in pre-tax income of 119.3 billion yen, up 42% from 84.0 billion yen in the same period a year ago. Net income increased 86% to 73.0 billion yen, from 39.3 billion yen in the same quarter of the previous year.
Consolidated Sales Breakdown by Product Category
The company's first quarter consolidated sales by product category, as compared with prior year amounts, are summarized as follows:
Digital AVC Networks3
Digital AVC Networks sales increased 5% to 975.5 billion yen, compared with 924.7 billion yen in the same period of the previous year. Sales of video and audio equipment increased 16% from the previous year. This result is due primarily to strong sales of flat-panel TVs, as well as favorable sales in digital cameras and DVD recorders. Sales of information and communications equipment decreased 3%, due mainly to sluggish sales in automotive electronics equipment.
Sales of Home Appliances increased 1% to 342.7 billion yen, compared with 339.9 billion yen in the previous year. Despite a sales decline in both compressors and other products, favorable sales in refrigerators and electric lamps led to an overall sales increase.
MEW and PanaHome
Sales of MEW and PanaHome increased 1% to 389.2 billion yen from 385.7 billion yen a year ago. At MEW and its subsidiaries, sales gains were recorded with favorable sales in electrical construction materials and automation controls. At PanaHome Corporation and its subsidiaries, sluggish housing market conditions led to a decrease in sales.
Components and Devices
Sales of Components and Devices decreased 5% to 269.3 billion yen, compared with 284.7 billion yen in the previous year. Sluggish sales of general electronic components and batteries resulted in a decrease in sales.
Sales for Other increased 4% to 175.3 billion yen, from 169.2 billion yen in the same period a year ago. Sales gains were recorded in factory automation equipment within this category.
Consolidated Financial Condition
The company's consolidated total assets as of June 30, 2008 increased 171.6 billion yen to 7,615.2 billion yen, compared with 7,443.6 billion yen at the end of fiscal 2008. This increase was due primarily to an increase in inventories for seasonal factors. Stockholders' equity increased 25.4 billion yen, compared with the end of the last fiscal year, to 3,767.7 billion yen. This result was due mainly to an increase in retained earnings and accumulated other comprehensive income, sufficient to offset the effects of repurchases of the company's own shares from the market.
Outlook for Fiscal 2009
The company expects the business environment from this fiscal year's second quarter onward to remain severe, with uncertainty of the global economy centered on the United States, and further price declines as a result of ever-intensified competition, as well as increasing prices for crude oil and other raw materials. Considering these conditions, the forecast for fiscal 2009, ending March 31, 2009, remains unchanged from the forecast announced on April 28, 2008.
Matsushita Electric Industrial Co., Ltd., best known for its Panasonic brand products, is one of the world's leading manufacturers of electronic and electric products for consumer, business and industrial use. Matsushita's shares are listed on the Tokyo, Osaka, Nagoya and New York stock exchanges.
For more information, please visit the following web sites:
Matsushita home page URL: http://panasonic.net/
Matsushita IR web site URL: http://ir-site.panasonic.com/
The full text of this release including financial tables can be found online at http://panasonic.co.jp/...
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