Panasonic books US$10 billion annual loss, largest ever by Japan manufacturer

The Japanese manufacturer was hit by falling sales of its electronics, but also booked a bevy of one-time restructuring fees

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Panasonic said Friday it booked a loss of nearly US$10 billion for the fiscal year that ended March 31, the largest ever loss by a Japanese manufacturer according to local media.

The Osaka-based electronics firm is in the midst of company-wide restructuring that includes the continued integration of Sanyo Electric and a shift to green technologies such as solar power and rechargeable batteries. It is also implementing a management shift, with Kazuhiro Tsuga, the head of its consumer electronics and TV business, to take over as President from Fumio Ohtsubo in June.

Panasonic, like many of its domestic rivals, is struggling to make its consumer products profitable as price drops squeeze margins. The company's results announcement comes a day after Sony said it booked a record net loss last fiscal year. Both companies are weighed down by their loss-making TV businesses, with Panasonic paying for heavy bets it has made on plasma flat-screen technology.

Like Sony, Panasonic predicts a recovery in the current fiscal year: It is targeting a ¥50 billion profit, less than one percent of its revenue forecast.

Panasonic said Friday it swung to ¥772 billion (US$9.7 billion) in the red, down from a ¥74 billion profit a year earlier. While much of the massive loss came from one-off restructuring charges and tax expenses, the company saw revenue fall 10 percent and operating profit, often viewed as a reflection of actual business performance, plunge 86 percent.

The loss is the biggest ever for a Japanese manufacturing company, according to Kyodo News agency and local newspapers.

The company's restructuring plan includes closing over half of its TV panel production lines and reducing its number of workers through voluntary retirement offers and transfers to outside companies. It has said it will combine its myriad of businesses into three main divisions: consumer, electronic components, and a "solutions" division that targets large projects in areas such as health care and manufacturing.

As with many Japanese companies, Panasonic's fiscal year runs from April to March.