Panasonic’s Operating Profit Nearly Quadruples in FY 2013

on May 10, 2013

Panasonic Corp.’s (TYO:6752) posted on Friday, May 10 an operating profit of 160.9 billion yen ($1.62 billion) for the year ended on March 31 – nearly four times higher than the 43.7 billion yen recorded in fiscal 2012.

The Osaka-based electronics manufacturer more than halved full-year pre-tax loss – to 398.4 billion yen from 812.8 billion yen in the previous 12 months – “due mainly to the business restructuring expense of 508.8 billion yen including impairment losses of goodwill and intangible assets, and losses related to buildings etc in other deduction for solar, consumer-use lithium-ion batteries and mobile phone businesses”.

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Total consolidated revenue declined 7 percent to 7.30 billion yen from 7.85 billion yen a year earlier. Domestic sales declined 9 percent to 3.79 billion yen, while international sales were down at 3.51 billion yen.
The Panasonic share price closed 3.74 percent higher at JPY 749.00 on Friday in Tokyo before the company released its latest results. The stock has gained 43 percent so far this year, keeping pace with the 40 percent gain in the benchmark Nikkei average.

**Stepping back from consumers electronics**
Panasonic has adopted a strategy to pull away from its struggling consumer electronics business in favour of other operations such as selling machines, components and electronic equipment to other businesses. This is in complete contrast with the strategy of its Japanese rival Sony Corp. (TYO:6758), which has been trying to revive its consumer electronics business that generates more than half of revenue by increasing investments in smartphones, cameras and game consoles. But at Panasonic home entertainment gadgets such as TVs and DVD players account for less than 20 percent of sales, which justifies the shift in focus. Panasonic’s most profitable segments currently are appliances, such as refrigerators and washing machines, and the “eco solutions” unit, which manufactures ceiling fans, light fixtures and other household fittings.

!m[Electronics Maker’s Shift Away from Consumer Gadgets Starts to Bear Fruit](/uploads/story/2202/thumbs/pic1_inline.png)
**Operating profit to rise further in FY 2014**
Also on Friday, Panasonic projected operating profit of 250 billion yen for the year ending March 31, 2014, a 55 percent increase on the previous year. Net income is seen at 50 billion yen, which is below the 63.7 billion-yen average of 16 analysts’ estimates compiled by Bloomberg.
**The Panasonic share price was JPY 749.00 as of 12.24 GMT, 10.05.2013.**


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