Major electronics makers lost hundreds of billions of yen in potential profits due to rapidly falling prices in fiscal 2004, and they expect the trend to continue in the current fiscal year.
On Thursday, the last of the major electronics firms announced their fiscal 2004 earnings. The reports underlined the growing gaps between the winners and losers in the industry, which was hit by a slump a few years ago and has since been carrying out sweeping restructuring measures.
Competition in the consumer electronics market has intensified, as manufacturers have been pushing up production of DVD recorders and flat-screen TVs to take advantage of the popularity of the latest digital products. The manufacturing surge resulted in a glut that has been driving down prices.
Matsushita Electric Industrial Co. and Sharp Corp. have emerged ahead of their rivals, enjoying brisk sales of flat-screen TVs and other popular products.
At the other end, Sanyo Electric Co. and Pioneer Corp. posted net losses for fiscal 2004, as falling consumer prices squeezed profit margins. Sony Corp.’s electronics business also suffered huge losses.
Matsushita Electric said Thursday its group net profit for fiscal 2004 jumped 39 percent to 58.48 billion yen, driven by robust sales of plasma display panel TVs and digital cameras.
The Osaka-based company said revenue for the year that ended in March rose 17 percent to 8.71 trillion yen.
Also Thursday, the company unveiled a set of defensive measures to protect against hostile takeover bids.
Under the new plan, the company will ask any party that intends to buy 20 percent or more of its outstanding shares to submit its reasons for wanting to make the purchase.
It will also ask the potential buyer to allow existing shareholders a certain period of time — either 60 or 90 days — to study the buyer’s intentions and business plans.
If the buyer refuses to comply with these requests, the company will respond with retaliatory measures, such as stock splits and new-issue warrants, intended to dilute the buyer’s stake.
Meanwhile, Hitachi Ltd. reported on the same day that group operating profit jumped 50 percent to 279.06 billion yen, on revenue of 9.03 billion yen, which was up 5 percent from a year earlier.
Its net profit grew three-fold, mostly due to differences in tax rates.
The company said that while the effects of price falls on its operating profit came to 239.5 billion yen during the period, it was more than offset by cost-cutting.
Mitsubishi Electric Corp. reported a 59 percent increase in net profit for fiscal 2004 to 71.18 billion yen, on revenue of 3.41 trillion yen, which was up 3 percent.
The firm has been spinning off money-losing businesses and said it posted a profit for all business units for the first time in nine years.
Operating profit at Toshiba Corp. dropped 11 percent to 154.81 billion yen, mostly due to the absence of pension-related gains booked a year earlier.
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