Matsushita Electric Industrial Co. said Friday its pretax profit for the October-December quarter jumped 70 percent, driven by robust sales of flat-screen TVs and DVD recorders.
Stronger-than-expected sales of digital consumer electronics products prompted the Osaka-based company to raise its full-year net profit estimate to 35 billion yen from 30 billion yen.
Net profit for the maker of the Panasonic brand was 24.25 billion yen, up 8 percent from a year earlier, on sales of 2.03 trillion yen, up 5 percent.
The increase in net profit was comparatively less than that of pretax profit due to larger tax payments on higher earnings, the company said.
During the three months, the company's sales of plasma display panel TVs grew 48 percent to 41 billion yen, and sales of DVD players and recorders increased 21 percent to 53.3 billion yen.
To maintain its hold on the rapidly growing market, Matsushita said it will invest a total 90 billion yen in PDP TV production over three years beginning April, bringing annual output to 2.4 million units during fiscal 2006 from 450,000 at present.
Relatively solid sales of conventional household items, including washing machines and dishwashers, in the quarter also helped, it said.
Weak sales of home appliances by Matsushita's rivals, including Sharp Corp., took the edge off the steep growth of the digital consumer electronics products.
But Matsushita is not immune to strong downward price pressure engulfing the market. During the quarter, falling prices sapped 73.1 billion yen from the company's earnings, it said.
"Digital consumer product prices are falling without a limit," Matsushita managing director Tetsuya Kawakami told a news conference in Tokyo. "The market competition is very fierce due to the entry of other makers."
For the full year to March, the company has forecast a net profit of 35 billion yen on revenue of 7.45 trillion yen.