OSAKA, JAPAN: Panasonic parent company Matsushita Electric Industrial Co., Ltd. (NYSE symbol: MC) today announced a 14 per cent increase in net income over the same period last year.
The financial results reported are the consolidated financial results for the third quarter ended December 31, 2007 and the nine months of the current fiscal year, ending March 31, 2008.
Consolidated group sales for the third quarter amounted to 2,344.6 billion yen (U.S.$20.57 billion), down 4 per cent from 2,436.8 billion yen in the same three-month period a year ago. Explaining the third quarter results, the company cited sales gains in all product categories, with strong sales in digital audiovisual (AV) products and white goods. Meanwhile, total sales declined because sales of JVC (Victor Company of Japan, Ltd. and its subsidiaries) 1 for the third quarter are excluded from the consolidated group sales.
Of the consolidated group total, domestic sales were down 6 per cent to 1,138.3 billion yen ($9.99 billion), from 1,214.5 billion yen a year ago. Overseas sales decreased to 1,206.3 billion yen ($10.58 billion) from 1,222.3 billion yen in the third quarter of fiscal 2007.
According to a company statement released today, during the third quarter under review, the electronics industry faced severe business conditions in Japan and overseas, due mainly to rising prices for crude oil and other raw materials, and continued price declines caused by ever-intensified global competition, mainly in digital products. Under these circumstances, in fiscal 2008, the first year of the new mid-term management plan GP3, Matsushita is implementing initiatives to accelerate its growth strategy.
Meanwhile, consolidated group sales for the nine months ended December 31, 2007 increased 1 per cent to 6,869.9 billion yen ($60.26 billion), compared with 6,826.3 billion yen in the same nine-month period a year ago. Explaining the nine-month results, the company cited sales gains in digital AV products, such as flat-panel TVs. Domestic sales amounted to 3,326.1 billion yen ($29.18 billion), down 2 per cent from a year ago, while overseas sales increased 3 per cent to 3,543.8 billion yen ($31.08 billion) from the previous year’s nine months.
For reasons similar to those given for third quarter results, the company’s operating profit for the nine months increased 12 per cent to 385.4 billion yen ($3.38 billion), from 343.2 billion yen in the comparable period a year ago. Pre-tax income amounted to 364.2 billion yen ($3.20 billion), down 3 per cent from 376.9 billion yen in the previous year.
This result is due mainly to an increase in expenses associated with the implementation of early retirement programs and the previous year’s gains of 27.3 billion yen on the sale of the investments regarding cable broadcasting business. Net income was up 14 per cent to 220.3 billion yen ($1.93 billion), from 193.8 billion yen in the same period a year ago.
AVC Networks sales increased 5 per cent to 1,131.3 billion yen ($9.93 billion), from 1,072.5 billion yen in last year’s third-quarter. Sales of video and audio equipment increased 10 per cent from the previous year’s third-quarter, due mainly to favorable sales in digital AV products such as flat-panel TVs and digital cameras.
In information and communications equipment, sales gains in automotive electronics and mobile phones led to a 1 per cent increase overall from a year ago.
Sales of Home Appliances increased 6 per cent to 331.0 billion yen ($2.90 billion), compared with 311.6 billion yen in last year’s third-quarter, due mainly to favorable sales in white goods. In particular, double-digit sales growth was recorded in air conditioners, compressors and refrigerators.
Net cash provided by operating activities in the fiscal 2008 third quarter amounted to 65.0 billion yen ($570 million). This was due mainly to cash inflows from net income and depreciation. Net cash used in investing activities amounted to 93.9 billion yen ($824 million). Capital expenditures for tangible fixed assets were 95.6 billion yen ($839 million), mainly consisting of manufacturing facilities for priority business areas such as plasma display panels (PDPs) and semiconductors. Net cash used in financing activities was 68.4 billion yen ($600 million).
Major factors included the repurchase of the company’s common stock and the payment of cash dividends.
All these activities resulted in cash and cash equivalents of 1,122.8 billion yen ($9.85 billion) at the end of December 2007, down 99.8 billion yen from the end of the first fiscal half.