Matsushita Electric Industrial Co., Ltd. has recently reported its consolidated financial results for the second quarter and first half, and non-consolidated (parent company alone) results for the first half, ended September 30, 2007, of the current fiscal year, ending March 31, 2008 (fiscal 2008).
Consolidated group sales for the second quarter increased 1 per cent to 2,285.8 billion yen (US$ 19.88 billion), from 2,252.6 billion yen in the same three-month period a year ago. Explaining the second quarter results, the company cited sales gains in all product categories except JVC (Victor Company of Japan, Ltd. and its subsidiaries). Of the consolidated group total, domestic sales decreased 1 per cent to 1,109.8 billion yen (US$ 9.65 billion), from 1,118.2 billion yen a year ago. Overseas sales increased 4 per cent to 1,176.0 billion yen (US$ 10.23 billion), from 1,134.4 billion yen in the second quarter of fiscal 2007.
During the second quarter under review, the electronics industry faced severe business conditions in Japan and overseas, due mainly to rising prices for crude oil and other raw materials and continued price declines caused by ever-intensified global competition, mainly in digital products. Under these circumstances, in fiscal 2008, the first year of the new mid-term management plan GP3, Matsushita is implementing initiatives to accelerate steady growth with profitability.
As part of such efforts, the company continues to strengthen a new series of products, as a core of its growth strategy, to capture leading market shares and make a significant contribution to overall business results. In overseas businesses, Matsushita is implementing initiatives to strengthen marketing activities tailored to regional characteristics. In addition, Matsushita is striving to transform itself into a manufacturing-oriented company—one that combines all the business activities of the Group toward the launch of products, thereby contributing to the creation of customer value. Matsushita is promoting wider collaboration across business fields and operating regions in order to reinforce product design and quality, procurement, logistics, overseas sales and other areas of its operations.
Regarding earnings, operating profit for the second quarter was up 3 per cent, to 146.1 billion yen (US$ 1.27 billion), from 142.3 billion yen in the same period a year ago, despite the effects from rising raw materials prices and ever-intensified global price competition. This improvement was due primarily to sales gains and the cost reduction efforts including materials costs and fixed costs, as well as the effects of a weaker yen. In other income (deductions), the company recorded 14.9 billion yen (US$ 129 million) as expenses associated with the implementation of early retirement programs and also incurred expenditures on product quality. These factors, as well as the previous year’s gains of 27.3 billion yen on the sale of the investments regarding cable broadcasting business and proceeds from tangible fixed assets, led to pre-tax income of 103.7 billion yen (US$ 902 million), down 34 per cent from 157.1 billion yen in the previous year’s second quarter. Net income was also down 17 per cent to 65.8 billion yen (US$ 572 million), as compared with 79.3 billion yen in the previous year’s second quarter.
Consolidated first-half results
Combining the second quarter results with those of the first quarter, consolidated group sales for the first fiscal half ended September 30, 2007 increased 3 per cent to 4,525.3 billion yen (US$ 39.35 billion), compared with 4,389.5 billion yen in the same six-month
period a year ago. Explaining the first half results, the company cited sales gains in all product categories except JVC. Domestic sales amounted to 2,187.8 billion yen (US$ 19.02 billion), a slight increase from a year ago, while overseas sales increased 6 per cent to 2,337.5 billion yen (US$ 20.33 billion) from 2,209.4 billion yen in the previous year’s first half, due mainly to favorable sales overall.
For reasons similar to those given for second quarter results, the company’s operating profit for the first fiscal half increased 6 per cent to 220.0 billion yen (US$ 1.91 billion), from 207.4 billion yen in the comparable period a year ago. In other income (deductions), the company recorded 15.8 billion yen (US$ 138 million) as expenses associated with the implementation of early retirement programs, and expenditures on product quality. These factors, as well as the previous year’s gains of 27.3 billion yen on the sale of the investments regarding cable broadcasting business, led to pre-tax income of 187.6 billion yen (US$ 1.63 billion), down 19 per cent from 232.5 billion yen last year. Net income was also down 9 per cent to 105.1 billion yen (US$ 914 million), as compared with 115.1 billion yen in the first half of the previous year. The company’s net income per common share was 49.32 yen (US$ 0.43) on a diluted basis, versus 52.38 yen in the first half of last year.
