Panasonic fights recession and yen in Q3

As expected, Panasonic on Wednesday announced job cuts, plant closures and a third-quarter loss of ¥380 billion ($709 million) due to onerous currency-exchange rates, higher raw materials costs, and the continuing consumer paralysis.

Operating profit for the Osaka-based company declined to ¥26.4 billion ($297 million), a drop of 84% from the same period last year.

There's really no good news in the earnings report, which states, "The company's comprehensive cost reduction activities, including material costs and fixed cost, were not sufficient to offset" the prevailing financial winds. Still, there's belt-tightening ahead for the electronics giant. The company says it will eliminate 15,000 jobs worldwide, about half of them in Japan, and close 27 plants, again about half of them in Japan.

Panasonic breaks its sales results apart by domestic (meaning Japan) and international results, and those numbers (though both decreases) are of interest. Sales in Japan declined just 10% to ¥1,023.4 billion ($11.5 billion), actually surpassing sales to the rest of the world, which were down 29% to ¥856.5 billion ($9.62 billion). Overall, sale decreased by 20%.

The company steeled its nerves and provided its outlook for the full fiscal year ending in March, and for the year-end dividend. Panasonic revised its previous net-sales forecast down by three-quarters of a billion yen, down to ¥7,750 billion ($87 billion). It predicts operating profit to weigh in at ¥60 billion ($674 million), down from ¥340 billion ($3.82 billion). And net income reverses from a profit of ¥30 billion ($337 million) to a loss of ¥380 billion ($4.27 billion). Panasonic last reported a fiscal-year loss in 2002.

The year-end per-share dividend decreases to ¥7.5 (eight cents), and total dividends for the fiscal year are predicted to total ¥30 (34 cents) per share of common stock.