Panasonic faces second annual loss
Panasonic, Japan's largest consumer-electronics maker, said it's in talks about closing some businesses as the company heads toward a second straight annual loss.
Shutting divisions is a "worst-case" scenario and the TV maker will try to secure jobs if any operations are sold, president Kazuhiro Tsuga told reporters late yesterday at the Consumer Electronics Show in Las Vegas.
He didn't elaborate on which units could close.
Panasonic needs to overhaul unprofitable operations such as plasma televisions and mobile phones to end losses, said Junya Ayada, an analyst at Daiwa Securities.
The Osaka-based company eliminated more than 38,800 jobs in the year ended September, or about 11 per cent of staff, as Japanese electronics makers struggle to compete with Apple and Samsung.
"The market is expecting Tsuga to come up with a drastic and convincing plan," Tokyo-based Ayada said by phone today.
"He needs to show specifics on how to revive the company."
Mr Tsuga, who is due to reveal a midterm plan by March 31, also said Panasonic is considering ventures and other options for its semiconductor business.
A tie-up is the "first priority," he said.
The TV maker has already announced plans to cut 8,000 jobs in the six months started October 1.
It also intends to end smartphone operations in Europe by March 31 and to close domestic mobile-phone plants in June.
The company was unchanged at 520 yen as of 2.29pm in Tokyo trading, while the benchmark Nikkei 225 Stock Average gained 1 per cent.
The stock dropped 20 per cent in 2012, a third straight annual decline.
Panasonic may pull out of businesses with operating margins of less than 5 per cent by March 2016, Mr Tsuga said in October.
Among Panasonic's seven main divisions, only the appliances unit will have an operating margin above that mark this fiscal year, based on its earnings forecast.
Eco solutions has an anticipated margin of 3.5 per cent, while the other units, including audio- visual, automotive and industrial devices, are expected to have margins of less than 2 per cent.