Japanese electronics major Panasonic Corp today cut its profit forecast by 90 per cent for the current fiscal year, citing intense price competition and appreciating yen.
The company now expects to post a net income of 30 billion yen for fiscal year 2009, compared to the earlier projection of 310 billion yen, the firm today said in a statement.
Earlier this month, Panasonic and Sanyo Electric had agreed to start talks for a capital and business alliance, a move which could create the largest electronics company.
Noting that the financial crisis has adversely impacted the business sentiment in Japan and overseas, Panasonic today said, "...The company's business conditions are deteriorating sharply, mainly due to the rapid appreciation of the yen, sluggish consumer spending and ever-intensified price competition. In addition, there are negative factors such as a write-down of investment securities as a result of the decline in stock prices and business restructuring expenses."
Further, the electronics major anticipates a consolidated net sales of 8,500 billion yen for fiscal year ending March 2009, against the prior forecast of 9,500 billion yen.
"Consolidated operating profit is expected to amount to 340 billion yen, down from the previous forecast of 560 billion yen. Consolidated income before income taxes is forecast to be 100 billion yen, down from the previously announced 500 billion yen," the statement added.
Panasonic, which is a leading plasma television maker, is eyeing Sanyo because the latter is prominent in the rechargeable batteries business. These batteries find extensive use in laptops and mobile phones.
