Matsushita profits up 39% despite heater fiasco

by Taiga Uranaka

Matsushita Electric Industrial Co. said Thursday robust sales of plasma display panel TVs and digital cameras boosted its earnings for the third quarter of fiscal 2005, raising its net profit by 39 percent to 49.3 billion yen.

Given the strong results, the Osaka-based consumer electronics giant that sells under the Panasonic and National brands revised its full-year net profit forecast upward by 20 billion yen to 130 billion yen, despite costs related to a massive recall of faulty kerosene heaters that have been connected to several deaths.

During the October to December quarter, revenue rose 4 percent to a record 2.4 trillion yen, according to company officials.

In the reporting quarter, Matsushita was forced to issue a large-scale recall of its kerosene heaters after it was found that they had a flaw that led to several deaths, even units that were earlier repaired.

At what is usually a crucial time ahead of the yearend shopping season, Matsushita, instead of its usual TV ads, ran 18,200 announcements calling on consumers to respond to the recall. The company said recall-related expenses will total 24 billion yen for the full fiscal year.

Despite the marketing handicap, the firm said it enjoyed a strong yearend holiday season. During the quarter, Matsushita’s sales of PDPs jumped 1.9 times to 148.3 billion yen.

Asked about the impact of upcoming sports events, including the Winter Olympics and the World Cup soccer finals, Senior Managing Director Tetsuya Kawakami said the company expects the events to give a bigger boost to sales than usual.

“Especially this year, the shift to flat-screen TVs is greater than in the usual Olympic year. We are seeing robust demand for them,” he said.

Strong third quarter

Mitsubishi Electric Corp. on Thursday reported an 88 percent increase for its third quarter net profit, led by strong sales of factory automation systems for auto industry and flat-panel makers.

The company posted 32.2 billion yen net profit on revenue of 834.5 billion yen, up 12 percent year on year for the three months that ended in December.