OUTLOOK - Matsushita Electric to report higher H1 profit on brisk digicam sales

OUTLOOK - Matsushita Electric to report higher H1 profit on brisk digicam sales

	Published : Mon, 29 Oct 2007 06:13 By : Agencies Print this Story

TOKYO (Thomson Financial) - Japan's Matsushita Electric Industrial Co Ltd, the world's largest consumer electronics maker, is expected to report Tuesday improved operating results for the first half to September on brisk sales of its digital cameras and electronics devices and a recovery in plasma TV sales.

Three analysts polled by Thomson Financial News are forecasting operating profit of between 210 billion and 220 billion yen.

In the same period last year, the company posted operating income of 207.4 billion yen, its biggest operating profit in 16 years. Net profit was 115.12 trillion yen while revenue was 4.39 trillion yen.

'Since the introduction of its new plasma display panel TVs in July, sales have been recovering across the world which, together with brisk sales of its digital cameras, gave a boost to profit growth,' said Mizuho Investors Securities analyst Mitsuhiro Osawa.

Osawa puts his forecast for first-half operating profit at around 220 billion yen.

Matsushita Electric sold 800,000 plasma TVs in the first quarter to June, up 10 percent, and 740,000 LCD TVs, up 40 percent.

In the first half to September last year, the maker of the Panasonic and National brands sold 1.38 million PDP TVs, up 77 percent from a year earlier, and 980,000 LCD TVs, up 69 percent.

'In addition to recovering its market share in the flat TV market, the solid performance of other products such as capacitors, factory automation systems and white goods (such as air conditioners and refrigerators) more than offset the negative impact of higher procurement costs and falling prices,' Credit Suisse analyst Koya Tabata said.

Tabata sees first-half operating profit of 210 billion yen.

Matsushita also benefited from the yen's weakness, as a weaker yen against the dollar makes its exports more competitive. In the first half to September last year, the export hedging cost averaged 115 yen against the dollar and 146 yen against the euro.

The deconsolidation of its struggling consumer electronics making unit, Victor Co of Japan Ltd (JVC), also helped improve Matsushita's performance after it cut its stake in JVC to 36.9 percent in August from 52.7 percent previously.

JVC, car electronics maker Kenwood Corp and the biggest shareholder in Kenwood, Sparx Group Co Ltd, announced in July an agreement to form a comprehensive capital and business alliance.

Kenwood and JVC have also agreed to consider merging their operations, possibly under a holding company, as early as 2008.

Analysts believe Matsushita Electric will stick to its year to March 2008 earnings guidance, citing uncertainty about sales during the Christmas sales season, which accounts for the bulk of its sales.

In July, Matsushita Electric forecast a full-year net profit of 246 billion yen and operating income of 477 billion yen on revenue of 8.78 trillion yen.

(1 US dollar = 114.17 yen)

yasuhiko.seki@thomson.com

--- by Yasuhiko Seki ---

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