Panasonic posts €540m quarterly profit

Panasonic posted third-quarter profit that beat analysts' estimates as Japan's No. 2 television maker stops making plasma sets to speed up reforms and recover from back-to-back annual losses.

Net income rose 20 per cent to 73.7 billion yen (€540 million) in the three months ended December 31, the Osaka-based company said.

Operating profit more than tripled to 116.6 billion yen in the quarter, on a 10 per cent increase in sales to about 2 trillion yen.

President Kazuhiro Tsuga, in his second year at the helm, suspended plasma panel production, trimmed smartphone and circuit board operations and sold a stake in chip factories to Israel's Tower Semiconductor to focus on growing businesses.

Panasonic gained 53 per cent in the past 12 months, outperforming the 5 per cent advance by competitor Sony, as Mr Tsuga moves away from unprofitable consumer businesses to focus more on meeting demand from automakers and homebuilders.

"Tsuga is doing what needs to be done to work out a reform at such a big corporation," Yasuo Nakane, an analyst at Deutsche Bank, said before the announcement.

“He’s paying close attention to cash-flow being generated at each business to make calls himself. The contribution of that has been significant.”

The company fell 6.9 per cent to close at 1,061 yen in Tokyo trading before the announcement.

The stock is down 13 per cent this year, compared with a 16 per cent decline by Sony and a 13 per cent drop by Japan’s benchmark Topix stock index.

Bloomberg