The Channel Wire

January 09, 2009

Panasonic Friday said it would pull back on capital expenditure in its television business and look to trim unprofitable business lines from its portfolio. Panasonic also warned the financial community that it may fall short of certain sales targets as its fiscal year comes to a close in March, according to The Wall Street Journal.

Panasonic President Fumio Ohtsubo said Panasonic will cut by 23 percent planned investments in two of its Japan-based factories that make TV flat panels. According to the Journal, Ohtsubo did not specify which of Panasonic's businesses face potential cuts or restructuring based on poor profitability.

Panasonic in November lowered its net profit forecast for the fiscal year by 90 percent; on Friday, it said some operations, particularly automotive electronics and semiconductors, would fall short of their numbers.

"It will be hard to meet all the numerical goals," said Ohtsubo during the briefing. "[Next year] will be an extremely tough year."

Ohtsubo assured investors Panasonic would take steps to shore up its bases. The Japanese company recently acquired Sanyo Electric Co., formerly a rival. Panasonic also hopes to sell 15.5 million plasma and LCD TVs in the new fiscal year, starting in April, using expanded product lineups and sales channels.

Panasonic's cautioning on missed numbers comes even as the consumer electronics vendor told news media it had outpaced at least its North American competitors in sales of high-definition televisions and Blu-ray players. Panasonic North America CEO Yoshihiko Yamada and COO Joe Taylor told Bloomberg News reporters at CES this week that North American sales had exceeded last year's total, even though growth percentage had slowed.

Recent research by the NPD Group's DisplaySearch arm suggests both LCD TVs and, more dramatically, plasma TVs, will see significant slowdowns in 2009.