Panasonic announced financial results for the third quarter

Consolidated group sales for the third quarter decreased 20 percent to 1,879.9 billion yen (16.314 billion euro), down from 2,344.6 billion yen (20.348 billion euro) in the same three-month period a year ago. Of the consolidated group total, domestic sales decreased 10 percent to 1,023.4 billion yen (8.882 billion euro), from 1,138.3 billion yen (9.879 billion euro) a year ago. Overseas sales decreased 29 percent to 856.5 billion yen (7.433 billion euro), from 1,206.3 billion yen (10.469 billion euro) in the third quarter of fiscal 2008.

The current financial crisis originated in the United States has spread across the world and the company’s outlook of the business environment has been extremely uncertain, said Panasonic. The company’s business conditions have worsened particularly since last October, due mainly to the rapid appreciation of the Yen, sluggish consumer spending worldwide and ever-intensified price competition. Under these severe circumstances, aiming at getting out of this difficult situation and getting growth back on original track, Panasonic is implementing initiatives for achieving further progress and strengthening management structure.

Operating profit for the third quarter was down 84 percent, to 26.4 billion yen (229 million euro), from 165.4 billion yen (1,435 billion euro) in the same period a year ago. This decrease was due mainly to the negative effects of sales declines caused by a sharp downturn of consumer spending both in Japan and overseas, ever-intensified global price competition, rising prices for raw materials and a stronger yen. The company’s comprehensive cost reduction activities including materials costs and fixed costs were not sufficient to offset these negative factors. In other income (deductions), the company incurred impairment losses of tangible fixed assets. As a result of these and other factors, pre-tax income for this period turned to a loss of 59.1 billion yen (513 million euro), compared with a profit of 176.6 billion yen (1.532 billion euro) in the same period a year ago. Accordingly, net income turned to a loss of 63.1 billion yen (547 million euro), compared with a profit of 115.2 billion yen (999 million euro) in the same quarter of the previous year.

Consolidated group sales for the nine months ended December 31, 2008 decreased 9 percent to 6,223.7 billion yen (54.012 billion euro) compared with 6,869.9 billion yen (59.620 billion euro) in the same period a year ago. Domestic sales amounted to 3,134.1 billion yen (27.199 billion euro), down 6 percent from 3,326.1 billion yen (28.865 billion euro) in the previous year’s period, while overseas sales decreased 13 percent to 3,089.6 billion yen (26.813 billion euro), down from 3,543.8 billion yen (30.754 billion euro) a year ago.

For reasons similar to those given for third quarter results, the company’s operating profit for the nine months decreased 34 percent to 254.5 billion yen (2.208 billion euro), down from 385.4 billion yen (3.344 billion euro) in the comparable period a year ago. Pre-tax income was 144.2 billion yen (1.251 billion euro), down 60 percent from 364.2 billion yen (3.160 billion euro) in the same period a year ago. Net income decreased 70 percent to 65.4 billion yen (567 million euro), compared with 220.3 billion yen (1. 911 billion euro) in the nine months of the previous year. The company’s net income per common share was 31.40 yen (0,27 Euro) on a diluted basis, versus 103.65 yen(0,90 euro) yen in the nine months of last year.

Panasonic announced a downward revision of the consolidated financial forecast for the full fiscal year 2009, ending March 31, 2009, from the previous forecast announced on November 27, 2008. Regarding net sales on a consolidated basis, the company has revised its previous forecast of 8,500 billion yen (73.767 billion euro) downward to 7,750 billion yen (67.258 billion euro). Consolidated operating profit is expected to amount to 60 billion yen (520 million euro), down from the previous forecast of 340 billion yen (2.95 billion euro). The consolidated result before taxes is forecast to be a loss of 380 billion yen (3.3 billion euro), down from the previous forecast of a profit of 100 billion yen (867 million euro). The company now expects a net loss of 380 billion yen( 3.3 billion euro), down from the previous forecast of a profit of 30 billion yen.(260 million euro).