Panasonic urged to slash further
Source: Bloomberg News |
November 1, 2012, Thursday
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Print Edition
Print Edition
PANASONIC Corp, Japan's third-biggest employer, cut almost 39,000 jobs in the past year, and its chief financial officer said the TV maker doesn't plan another round of cuts. Investors say it has to.
Even after reducing its workforce by about 11 percent - almost double the reductions at Sony Corp and Sharp Corp combined - Panasonic will lose 765 billion yen (US$9.6 billion) in the year ending in March, the company said yesterday. The potential second-highest loss in its history prompted Panasonic to skip a dividend for the first time since 1950 because of an "urgent need" to improve its financial position.
"They have to cut, cut, cut," said Edwin Merner, president of Atlantis Investment Research Corp in Tokyo, which manages about US$300 million in assets. "They're not doing it fast enough. You have to be lean and mean."
The loss forecast, 30 times bigger than analysts estimated, illustrates how Japanese consumer-electronics companies are failing to come up with hit products to challenge Samsung Electronics Co and Apple Inc. Sony, Panasonic and Sharp are valued at near three-decade lows as investors remain unconvinced Japan's three largest TV makers know how to rebound from slumping demand, falling prices and mounting losses.
The bulk of Panasonic's forecasted loss for the year ending in March will come from 440 billion yen of restructuring expenses, over 10 times greater than what the company projected earlier.
Even after reducing its workforce by about 11 percent - almost double the reductions at Sony Corp and Sharp Corp combined - Panasonic will lose 765 billion yen (US$9.6 billion) in the year ending in March, the company said yesterday. The potential second-highest loss in its history prompted Panasonic to skip a dividend for the first time since 1950 because of an "urgent need" to improve its financial position.
"They have to cut, cut, cut," said Edwin Merner, president of Atlantis Investment Research Corp in Tokyo, which manages about US$300 million in assets. "They're not doing it fast enough. You have to be lean and mean."
The loss forecast, 30 times bigger than analysts estimated, illustrates how Japanese consumer-electronics companies are failing to come up with hit products to challenge Samsung Electronics Co and Apple Inc. Sony, Panasonic and Sharp are valued at near three-decade lows as investors remain unconvinced Japan's three largest TV makers know how to rebound from slumping demand, falling prices and mounting losses.
The bulk of Panasonic's forecasted loss for the year ending in March will come from 440 billion yen of restructuring expenses, over 10 times greater than what the company projected earlier.
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