Japanese electronics maker Panasonic Corp slashed its annual outlook to a $5.5 billion net loss on Monday, its worst in a decade, as restructuring costs soared and weak demand in the United States and Europe eroded income.
The 420 billion yen loss, which will be its second biggest loss ever, compares with the company's previous forecast for a net profit of 30 billion yen in the year to March 2012 and last year's net profit of 74 billion yen. It slashed its estimate for annual TV sales to 19 million sets from 25 million.
In the July-September quarter, the company earned an operating profit of 42 billion yen, beating its own forecast of a 4.4 billion yen profit, but falling short of an analysts' consensus of 50 billion yen. A year earlier, it earned an operating profit of 85.2 billion yen.
The maker of Viera televisions and Lumix cameras cut its full-year operating profit forecast to 130 billion yen from 270 billion yen. That compares with market expectations of a 225 billion yen profit, based on the average estimate of 21 analysts polled by Thomson Reuters I/B/E/S.
The soaring yen is making it harder for Panasonic to compete with the likes of Samsung Electronics.
For the remainder of the business year Panasonic estimates a dollar-yen rate of 76 yen and a rate of 105 yen against the euro.
In April, Panasonic said it would cut 17,000 jobs and close up to 70 plants. Sources have said it will slash plasma TV panel output and drop plans for a solar panel factory and a battery plant expansion in Japan.
Panasonic President Fumio Ohtsubo is set to brief on the company's growth strategy at 0800 GMT, at which he is expected to announce details of a broad restructuring, aimed at cutting costs and stripping out overlapping businesses following the buyout of subsidiary Sanyo.
Shares of the company closed 2.1 percent lower before the results. They have fallen 31 percent so far this year, compared with a 13 percent decline for the broader market.
($1 = 75.760 Japanese Yen)
(Reporting by Isabel Reynolds; Editing by Chris Gallagher and Edwina Gibbs)