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Panasonic posts record loss, sees tough year
TOKYO (Reuters) - Japanese electronics maker Panasonic Corp (6752.T) forecast a bigger-than-expected annual loss after booking a record quarter of red ink battered by weak demand, price falls and hefty restructuring costs.
The company, which vies with Sony Corp (6758.T) for the title of the world's largest consumer electronics maker, has seen its earnings deteriorate as the global economic crisis prompts consumers to cut spending on flat TVs and digital cameras.
Like many other Japanese companies, it has suffered an additional blow as strength in the yen made its products less price-competitive overseas.
It plans to close 40 manufacturing sites in two years to next March, and cut 15,000 jobs as part of its cost-cutting measures.
While Panasonic expects its key TV business to remain in the red this year, it forecast overall operating profit growth of around 3 percent.
"Compared with Sony and other rivals, Panasonic has a good track record of restructuring its way back to profitability," said Takeshi Osawa, senior fund manager at Norinchukin Zenkyoren Asset Management.
"I have more faith in Panasonic's ability to recover than I do for other firms."
The world's No.1 plasma TV maker ahead of Samsung Electronics Co (005930.KS) expects a net loss of 195 billion yen ($2 billion) for the year to March.
That would be 86 percent larger than a consensus in a poll of 17 analysts by Thomson Reuters, but about half the size of the 378.96 billion yen loss it posted a year earlier.
The company said it expects restructuring costs of 88 billion yen this financial year, after booking 367.4 billion yen for the year just ended.
Panasonic aims to boost its flat TV sales by 54 percent to 15.5 million units this year. But sharp price falls and a firmer yen are likely to keep its TV operations from turning profitable, the company said.
Panasonic, which competes with Canon Inc (7751.T) and Sony in digital cameras and camcorders, said its net loss for the January-March quarter totaled 444.3 billion yen, down from a 61.6 billion yen profit a year earlier.
Panasonic, formerly known as Matsushita Electric, is in talks with regulators to obtain approval for its planned acquisition of smaller rival Sanyo Electric Co Ltd 6764.T.
Sanyo is the world's largest maker of rechargeable batteries used in mobile phones, notebook PCs and hybrid cars, and the acquisition is set to strengthen Panasonic's green energy businesses substantially.
Panasonic shares rose 4.8 percent ahead of the results, outperforming a 3.7 percent rise in the Tokyo market's electrical machinery index.
Its shares have gained 31 percent so far this year, outperforming a 22 percent increase in the subindex.
(Additional reporting by Taiga Uranaka; Editing by Edwina Gibbs)
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