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article imagePanasonic shares soar 19% after return to profit

By AFP     Feb 4, 2014 in Business

Panasonic shares rocketed 19 percent on Wednesday after the struggling Japanese electronics giant said it swung into the black with a $2.4 billion profit in the nine months to December.

The Tokyo-listed shares closed at 1,262 yen as investors reacted to the announcement, which came after markets closed Tuesday.

The stock had sunk seven percent in the previous session, hit by a broad market sell-off.

Panasonic -- recovering from combined losses topping $15 billion in the past two fiscal years -- said net profit came in at 243.0 billion yen ($2.4 billion) in the first three quarters, reversing a net loss of 623.8 billion yen over the same period a year ago. Sales rose 4.4 percent.

The firm, which makes everything from appliances and televisions to GPS navigation products and batteries, credited its healthier balance sheet to cost-cutting, buoyant auto division sales, and a fall in the value of the yen.

The currency's decline -- losing about a quarter of its value against the dollar -- has helped Japanese exporters by making them more competitive overseas and inflating repatriated profits.

Panasonic's results come as the country's once world-beating electronics giants, including Sony and Sharp, undergo painful restructurings aimed at stemming years of record losses.

File photo: Panasonic s 4K curved OLED televisions are displayed at the Panasonic booth  at the Inte...
File photo: Panasonic's 4K curved OLED televisions are displayed at the Panasonic booth, at the International CES at the Las Vegas Convention Center, in Nevada, on January 7, 2014
David Becker, Getty/AFP/File

The struggling sector has faced serious challenges in recent years, with television sales plunging while rivals such as Apple and Samsung overtook them in the lucrative smartphone market.

Panasonic has said it will abandon the consumer smartphone market and stop production of plasma television screens, in line with a broader industry shift away from plasma units. Hitachi and Pioneer have also exited the market in recent years.

Sales of Panasonic's household appliances and digital consumer products, including its struggling television business, remained weak as it shifts attention away from loss-making divisions as part of a wider restructuring.

Analysts have been calling on the sector to dump money-losing businesses and shift their attention to profitable areas.

On Tuesday, Sharp booked a 17.7 billion yen net profit in the April-December period, reversing a whopping net loss of 424.3 billion yen a year earlier. Sales jumped 21 percent on brisk demand for panels, including its popular "IGZO" displays for mobile phones, said the maker of Aquos-brand electronics.

Sony, which reports it earnings on Thursday, has also returned to profit after losing money four years in a row.

On Wednesday, Sony denied media reports that it was in talks to sell its struggling personal computer business, under the Vaio brand, to a Japanese investment fund.

Sharp shares slipped 2.83 percent to 308 yen by the close while Sony rose 4.57 percent at 1,600 yen.

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