Panasonic slashes profit forecast by 90 pct

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Tokyo: Panasonic slashed its annual profit forecast by 90 per cent, blaming a strong yen, sluggish sales and heavy discounting as electronics makers fight for market share amid a global economic downturn.

Panasonic Corp. said today it now expects USD 316 million in net profit for the fiscal year ending March 2009, less than a tenth of its earlier profit forecast of USD 3.3 billion.

The Osaka-based company also lowered its sales forecast for the fiscal year to USD 89.5 billion from an earlier USD 96.8 billion.

Panasonic, which changed its name from Matsushita Electric Industrial Co on Oct 1, said its business conditions were "deteriorating sharply," battered by sluggish consumer spending and intense price competition.

The surging yen, which erodes the value of overseas earnings, is another negative, and write-downs on investments caused by nose-diving stock prices will also take a toll, it said.

The latest projection would mark a 89 per cent plunge in profit from the previous fiscal year. Panasonic reported 282 billion yen in profit on 9 trillion yen in sales for the last fiscal year.

Panasonic has been trying to take over smaller Japanese rival Sanyo Electric Co, a move that would create one of the world's biggest electronics companies.