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[Canis lupus]

(Financial Times) -- Panasonic has warned it will suffer a loss of nearly $10bn for the second consecutive year, discarding an earlier prediction that it would return to profit, in a move that underscores the deep and persistent problems facing Japan's consumer electronics sector.

The Osaka-based company on Wednesday said it expected to end the financial year to next March with a net loss of Y765bn ($9.6bn), a dramatic reversal of its previous forecast for a Y50bn profit. It said it would not pay a dividend this year for the first time since 1950.

A loss of that scale would be only slightly smaller than Panasonic's record Y772bn deficit last year, and would bring its cumulative losses for the past five years to nearly Y2tn.

The company said it was writing down the value of past investments in solar panels, lithium-ion batteries and mobile phones, areas on which it had bet heavily only to be undone by cheaper or more innovative foreign competitors.

The decision broadens a restructuring that began with the company's unprofitable television division last year.

Panasonic is also taking a large tax charge, of Y412.5bn, related to its prolonged earnings slump.

Not all of its reversal came from one-time write-offs, however: it cut its annual sales forecast by 10 per cent, to Y7.3tn, and its projection for operating profit -- earnings before restructuring charges, taxes and other items -- by nearly half to Y140bn, citing weakening global demand for consumer electronics.

The company said it was writing down the value of goodwill and other intangible assets related to the solar, battery and phone businesses by a total of Y355.5bn.

"In solar and consumer lithium-ion batteries, we are revising our sales and investment strategy in light of continuous price falls," it said. In mobile phones, it acknowledged that its "domestic share is falling and we are rethinking our foreign expansion."

Panasonic made a last-ditch effort to compete in smartphones with the likes of Apple and Samsung this year by resuming sales of the devices in Europe, a market it had previously abandoned. But the move has not borne fruit and the company on Wednesday said it was withdrawing from the market for good.

The tax charge was forced on Panasonic by accounting rules governing the treatment of so-called deferred tax assets -- credits that are accumulated during loss-making years and redeemed when a company returns to profit. If losses persist for too many years, accountants deem the company's prospects for redeeming them to have receded, and their value is written off.

Other Japanese consumer electronics groups are also struggling to compete as products such as flatscreen TVs have become nearly indistinguishable commodities, and plunged in price as a result. The high cost of manufacturing in Japan -- exacerbated by a strong yen -- has given a decisive advantage to rivals in South Korea and China.

Sony and Sharp, which like Panasonic suffered heavy losses last year, may also be forced to revise their forecasts when they report their earnings on Thursday.

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[TUSR]

How can one continuously lose 10B and still exist.

On another note: I have an old ass DLP Panasonic TV that I still use. Love it.

 

[ymmv]

I love my Panasonic plasma. If they every quit the TV business, I've got to buy one to replace my current four year old model.

 

[Canis lupus]

I love my Panasonic plasma. If they every quit the TV business, I've got to buy one to replace my current four year old model.

Their flagship Viera models are close to catch up with the old Kuro sets, hang on Panasonic!

 

[Polari]

They've lost $25 billion over the last five years? How are they still in business? It's a shame the Eluga seems to have flopped as at least in terms of design they were pretty nice.

 

[Biggzy]

How on earth do you lose $10bn? Are Panasonic making plasma televisions and just storing them somewhere?

 

[TUSR]

How on earth do you lose $10bn? Are Panasonic making plasma televisions and just storing them somewhere?

stock piling plasma to sell for buying video games

 

[AdventureRacing]

How on earth do you lose $10bn? Are Panasonic making plasma televisions and just storing them somewhere?

Seriously. It's a pretty amazing feat to be losing that much money.

 

[jaxword]

Time to call Disney!

 

[Takao]

How much money do these guys have in their reserve? I can't imagine it's much with continued losses of this scale.

 

[Pein]

Poor panasonic, I love my panasonic plasma.

 

[BGBW]

Don't worry Panasonic. I'm in the market for a new television. I'll make sure it's a Panasonic!

 

[Aguirre]

i have a panasonic widescreen for gaming. cant fault it.

 

[reggie]

Love my Panasonic Plasma. Hopefully there aren't nearing their death.

 

[Dead Man]

I don't care if the stop everything else, they need to keep making TV's. Where else will I get my next plasma?

 

[Nevasleep]

They've cut about 200 jobs In my area over the last year.

 

[Griffin]

Love my Eneloop batteries.

 

[zomgbbqftw]

So who goes bankrupt (or gets bailed out by the Japanese government) first, Sharp or Panasonic?

Sony and Toshiba not looking so bad now...

 

[TUSR]

So who goes bankrupt (or gets bailed out by the Japanese government) first, Sharp or Panasonic?

Sony and Toshiba not looking so bad now...

Apple is shifting display orders to Sharp, these guys shouldn't be in the red so bad.

 

[user_nat]

Love my Eneloop batteries.

Isn't that Sharp?

 

[TUSR]

Isn't that Sharp?

Sanyo, majority share owned by Panasonic

 

[polyh3dron]

shit.. guess I need to buy a VT Series plasma soon before they go under then.

I wish it wasn't so unprofitable to make good TVs. Pioneer and now Panasonic.

 

[shinshoryuken]

Their flagship Viera models are close to catch up with the old Kuro sets, hang on Panasonic!

So true lol...they still can't catch up with the old kuros even though they bought the kuro tech from pioneer..

 

[leadbelly]

Japanese electronics companies aren't doing too well it seems.

 

[Radec]

Sony to buy 10% of the company..

 

[xbhaskarx]

Panasonic televisions seem popular enough... what is the explanation behind these losses?

 

[StriKeVillain]

I actually have a new Panny plasma being delivered on Monday. They make great tvs, sucks that they can't operate profitably, though.

 

[victreeb3l]

well i did my part by buying a panasonic hdtv a few months ago. damn 10b loss...two years in a row. how much money do these guys have in their bank to absorb these..

 

[RukusProvider]

Panasonic televisions seem popular enough... what is the explanation behind these losses?

Goodwill write down, deferred taxes, drop is TV sales, very slim margins in the CE industry.

 

[shinshoryuken]

3d gimmick didn't do so well..

 

[Mistle]

Their plasmas are just the best, it'd really suck to see them go under.

 

[Noshino]

Panny

I love my plasma, will never go back to LCD/LED, specially not Samsung's.

So who goes bankrupt (or gets bailed out by the Japanese government) first, Sharp or Panasonic?

Sony and Toshiba not looking so bad now...

Isnt Canon in worse shape than Sharp?

Also, both Sony and Toshiba have been in better shape than the other ones mentioned for a while now.

Sanyo, majority share owned by Panasonic

Sanyo is owned by Panasonic

 

[rkn]

Commodities? I know a genuine Panaphonics when I see one.

 

[BertramCooper]

Are there any Japanese tech companies that are doing well right now?

 

[shinshoryuken]

Their plasmas are just the best, it'd really suck to see them go under.

Their plasmas are the best..but only because pioneer is out of the game. Pioneer was 2 step ahead of panasonics in terms of plasma tech.

To this day, no plasma can touch the kuro line.

 

[Yopis]

Viera sets are awesome.sad news.

 

[CiSTM]

Are there any Japanese tech companies that are doing well right now?

No. Well at leastt when it comes to consumer electrics.

 

[Akira]

If Apple kindly donated their (record) last quarter profits, Panasonic would still have a loss of almost $2 billion. :O

I'm worried for Panasonic. They have some of the best TVs right now, but what is their plan for the future with regards to TV tech? What technology are they banking on? Surely they would have moved on from plasma by 2020...

 

[daw840]

Well. They should be good now. I just bought a 65GT50 for almost 3 grand including the warranty an tax. I'm sure that will right the ship.

 

[zomgbbqftw]

Isnt Canon in worse shape than Sharp?

Also, both Sony and Toshiba have been in better shape than the other ones mentioned for a while now.

To some degree, but that is more to do with future strategy and direction than raw financials. The world of cameras has been changing for a while now, compacts have been muscled out by smartphones and now both bridge cameras and DSLR cameras are facing immense pressure from MILCs from Sony, Panasonic and Oly.

Canon as a company are still profitable and viable because of their vast lens ecosystem and the number of owners invested in it. However, if they continue to put out shit cameras and don't compete in the MILC market properly then their long term future is definitely questionable to say the very least.

To show you what I mean, I had a robbery recently at my place, my 7D and lenses got stolen, to the value of around £3500, after looking at what is available to replace it all, I decided to buy a Fuji XE-1 with the Fujinon 35mm f1.4 or NEX-6 with Sony's 35mm f1.8 and I'll take it from there. Canon didn't even enter into the equation since the EOS-M is a pile of horseshit and I don't want a bulky SLR that I have to lug around and Nikon are in the same boat. While my situation is exceptional in that I had my current kit burgled and got a massive cash settlement to buy new stuff with, others have been waiting very patiently for Canon and Nikon to make a splash in the MILC market, but they haven't and scores of people are now buying Sony, Fuji and Oly instead.

Not only that but Sony just announced the F5 and F55 which pretty much kills Canon's pro offering dead. It's tough times for them right now as Alexa, RED and Sony have been making massive advancements while Canon have been repurposing $2000 SLR bodies and selling them for $15000.

 

[jett]

I don't understand how Panasonic still lives after $20B in loss.

 

[zomgbbqftw]

I don't understand how Panasonic still lives after $20B in loss.

The losses are associated with balance sheet writedowns rather than losing actual money. It's still bad though.

 

[Buddha Beam]

"Nintendo to buy Panasonic, announces plans to enter consumer electronics game"

And 5 years later, "Disney to buy Nintendo-Panasonic for 3 Billion"

 

[Spectrum128]

lets hope they're around in 10 years to honour the 10 year warranty on my new Panny Washing Machine's motor.

 

[negitoro7]

Hope they stick around for a while yet, I'm about to invest heavily in their GH3 $1300 camera, plus a couple of a ~$1000+ lenses.

 

[zomgbbqftw]

Hope they stick around for a while yet, I'm about to invest heavily in their GH3 $1300 camera, plus a couple of a ~$1000+ lenses.

I wouldn't worry too much, if Panasonic cut their TV division they will be relatively profitable, however, the writedown could be enough to sink the company.

 

[aku:jiki]

Hey, my mid-range, low-price but still great TV is Panasonic! Been very happy with it so I guess it would suck to see them go. Then again, how the fuck do you lose that much money holy shit...

 

[slit]

If I find it, will I get a cut from it.

 

[Dead Man]

Hey, my mid-range, low-price but still great TV is Panasonic! Been very happy with it so I guess it would suck to see them go. Then again, how the fuck do you lose that much money holy shit...

That's my problem. If Panasonic stops making plasmas, who do I go to for good 50" screens at a reasonable price?

 

[zomgbbqftw]

Hey, my mid-range, low-price but still great TV is Panasonic! Been very happy with it so I guess it would suck to see them go. Then again, how the fuck do you lose that much money holy shit...

The problem is that the TV you bought may have been cheap for you to buy, but it was not cheap to produce. Almost all of Panasonic's TVs are sold at a loss.