Panasonic forecast on Friday a rebound in operating profit in the current financial year as cost cutting boosts profitability and trims losses in its TV unit.
The company, which posted a record net loss of 772.2 billion yen for the previous business year to March 31, forecast an operating profit of 260 billion yen, compared with a consensus estimate of 241.5 billion yen profit from analysts surveyed by Thomson Reuters I/B/E/S.
With investors concerned about further losses in its TV unit, Panasonic's shares have lost more than 12 per cent since the start of the year, compared with a 5.9 per cent rise in the benchmark Nikkei 225 index.
The maker of Viera sets said it expected sales of flat screen TVs to fall to 15.5 million units this business year after it sold 17.5 million TV sets in the previous year.
The company said the struggling television division was unlikely to return to black in the year ending next March.
Kazuhiro Tsuga, 55, currently in charge of revamping the TV business, takes over as president of Panasonic in June.
Shrinking plasma demand
Like domestic rivals Sony and Sharp, Panasonic's TV business has been hammered by competition from Korea's Samsung Electronics and shrinking demand for its large plasma sets.
By 2015, research company DisplaySearch estimates that demand for plasma sets will shrink 38 per cent to $7 billion.
Current boss Fumio Ohtsubo insists that a fresh round of restructuring at Panasonic that eliminated 17,000 jobs will lead the TV unit back to profit and spur a V-shaped recovery at the company, which makes products ranging from refrigerators, fax machines and TVs to light bulbs, bicycle pumps and hair dryers.
Much of its net loss was the result of charges to revamp the company, although writedowns for its Sanyo Electric unit added to the deficit.
The company, nonetheless, still employs 350,000 people worldwide, three times as many as at Samsung Electronics and double Sony's workforce.
The company is relying on sales of home appliances, solar panels and batteries to help boost profits.
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