News Release 2002/2/21
FOR IMMEDIATE RELEASE
Media Contacts: Akira Kadota, International PR, Tokyo
(Tel: 03-3578-1237, Fax: 03-3437-2776)
Yoshihiro Kitadeya, International PR, Osaka
(Tel: 06-6908-0447, Fax: 06-6907-2013)
|ANNOUNCEMENT OF FINANCIAL RESULTS |
(Note: Dollar amounts for the most recent period have been translated for
MATSUSHITA REPORTS THIRD-QUARTER AND NINE-MONTH RESULTS
Posts Further Setbacks and Increased Restructuring Charges
convenience at the rate of U.S.$1.00 = 132 yen.)
Matsushita Electric Industrial Co., Ltd. today reported its consolidated financial results for the fiscal third quarter and nine months, ended December 31, 2001.
Consolidated group sales for the third quarter were down 13% to 1,737.2 billion yen (U.S.$13.16 billion), from 1,992.6 billion yen in the same three-month period a year ago. Of the total, sales in Japan decreased 24% to 803.7 billion yen ($6.09 billion), from 1,054.8 billion yen in the same quarter of the previous year, while overseas sales were mostly unchanged at 933.5 billion yen ($7.07 billion), compared with 937.8 billion yen in the same quarter a year ago. Excluding the effects of currency translation, overseas sales decreased 9% from a year ago on a local currency basis.
In explaining third-quarter results, Matsushita reiterated the worsening global economic environment and persisting overcapacity in the IT industry worldwide, as well as depressed market conditions in Japan, as the principal factors for sales and earnings declines. Although the U.S. economy has shown modest signs of recovery after a downturn following the terrorist attacks of September 11, the company said
that the Japanese economy suffered further setbacks due to stagnant consumer demand and slow capital investment, while Asian and European economies also weakened.
Consolidated operating profit* for the third quarter declined to a loss of 69.7 billion yen ($528 million), as compared with an operating profit of 59.4 billion yen recorded in the year-earlier quarter. Matsushita attributed this operating loss to sales declines, especially in mobile communications equipment, including cellular phones, and components and devices for the IT industry, and the adverse effects of intensified global price competition. The company's efforts to reduce fixed costs and parts and materials costs were not sufficient to offset these negative factors. Furthermore, the company incurred increased restructuring charges related to restructuring activities, including additional retirement allowances for early retirement programs. As a result, consolidated income before income taxes for the third quarter turned to a loss of 212.9 billion yen ($1.61 billion), compared with income before income taxes of 45.6 billion yen in the same quarter a year ago. Accordingly, the company recorded a net loss of 172.0 billion yen ($1.30 billion), down sharply from a net income of 22.8 billion yen in the previous year's third quarter.
Consolidated net loss per common share for the quarter was 82.74 yen ($0.63) on a diluted basis, versus a net income per common share of 10.53 yen on the same basis a year ago.
Consolidated group sales for the nine months ended December 31, 2001 decreased 11% to 5,122.8 billion yen ($38.81 billion), compared with 5,729.7 billion yen in the same nine-month period of the previous year. The company recorded an operating loss for the nine-month period of 145.4 billion yen ($1.10 billion), down from an operating profit of 159.0 billion yen in the same period last year. Income before income taxes for the nine months turned to a loss of 300.2 billion yen ($2.27 billion), as compared with an income before income taxes of 150.7 billion yen in the same period a year ago. This resulted in a net loss for the nine months of 241.5 billion yen ($1.83 billion), from a net income of 74.2 billion yen in the same period of the previous year.
Consolidated net loss per common share for the nine months was 116.15 yen ($0.88), compared with a net income per common share of 34.22 yen a year ago, both on a diluted basis.
Third-quarter Sales Breakdown by Product Category
The company's third-quarter consolidated sales by major product category are summarized as follows:
AVC Networks sales declined 6% to 1,040.7 billion yen ($7.88 billion), compared with 1,104.3 billion yen in the same three-month period a year ago. Within this segment, sales of video and audio equipment increased 4% from the previous year, as a result of solid overseas sales of TVs and DVD players and discs, which offset sales declines in VCRs.
In information and communications equipment, although sales of car audiovisual (AV) equipment, CD-R/RW drives, and broadcast- and business-use AV equipment rose steadily thanks to overseas growth, sales declines in mobile communications equipment, including cellular phones, as well as hard disk drives, facsimile machines and other products, resulted in a 14% overall sales decrease within this category.
Sales of Home Appliances fell 13% to 307.6 billion yen ($2.33 billion), compared with 354.9 billion yen in the previous year's third quarter. Declines in domestic demand for refrigerators and washing machines were among the reasons for decreased sales in this segment.
Sales of Industrial Equipment were 55.5 billion yen ($421 million), down 47% from 105.7 billion yen in the year-earlier three-month period, due mainly to a continuing decline in orders from the IT industry, especially for factory automation (FA) equipment, in both domestic and overseas markets.
Components and Devices
Sales of Components and Devices decreased 22% to 333.4 billion yen ($2.53 billion), compared with 427.7 billion yen in the same period a year ago. Although sales of compressors for air conditioners and refrigerators were up from the previous year, further declines in demand from the mobile communications and other IT-related equipment industries resulted in drastic sales reductions for semiconductors, general components, electric motors and others.
Outlook for the Full Fiscal Year 2002, ending March 31, 2002
Matsushita announced today a revision of its forecast made on October 30, 2001 for annual consolidated and non-consolidated financial results for the current fiscal year, ending March 31, 2002 (fiscal 2002). In the face of global economic conditions that remain unclear, Matsushita expects that the current severe business environment will continue through the fourth quarter, affecting in particular the AVC Networks, and Components and Devices categories. Furthermore, the company anticipates increased expenses related to employment restructuring initiatives, as well as various business restructuring activities, and losses on valuation of investment securities on the assumption that current low market prices of Japanese stocks will persist through the end of March 2002. Such expenses would amount to approximately 350 billion yen on a consolidated basis, the company said.
On a consolidated group basis, the company maintained its forecast for annual sales for the current fiscal year of approximately 6,800 billion yen, a decrease of 11% from the previous fiscal year. Consolidated loss before income taxes is now anticipated to be about 585 billion yen, compared to the previous forecast for pre-tax loss of 370 billion yen. Net loss for the fiscal year is forecasted to be approximately 438 billion yen, as compared with the previous forecast for net loss of 265 billion yen.
On a non-consolidated, parent company-alone basis, the company expects sales for the full fiscal year to decrease 20% to approximately 3,860 billion yen, as compared with the previous forecast of 4,030 billion yen. Parent-alone recurring profit is now expected to result in a loss of some 45 billion yen, replacing the earlier forecast of a recurring loss of 20 billion yen. Parent-alone net loss for the full fiscal year is forecasted to be approximately 135 billion yen, instead of the previous forecast for net loss of 68 billion yen.
Matsushita today announced that its Board of Directors intends to revise the year-end cash dividend proposal to 3.75 yen per common share, instead of the earlier-announced 6.25 yen per common share, subject to further Board resolutions and approval by shareholders at the annual general meeting in late June 2002. If implemented, total dividends for fiscal 2002, including an interim dividend of 6.25 yen per common share paid in December 2001, will be 10.00 yen per common share, as compared with 12.50 yen for the previous fiscal year.
Matsushita Electric Industrial Co., Ltd. is one of the world's leading producers of electronic and electric products for consumer, business and industrial use, which it markets around the world under the "Panasonic," "National," "Technics" and "Quasar" brand names. Matsushita's shares are listed on the Tokyo, Osaka, Nagoya, Fukuoka, Sapporo, Amsterdam, Dusseldorf, Frankfurt, New York, Pacific and Paris stock exchanges. For more information, visit the Matsushita web site at the following URL: http://panasonic.co.jp/global/
Disclaimer Regarding Forward-Looking Statements
This press release includes forward-looking statements (within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934) that reflect the plans and expectations of Matsushita Electric Industrial Co., Ltd. ("MEI") and its group companies (collectively, the "Matsushita Group") in relation to annual consolidated and non-consolidated financial results for the year ending March 31, 2002 and year-end dividend for the year ending March 31, 2002. To the extent that statements in this press release do not relate to historical or current facts, they constitute forward-looking statements. These forward-looking statements are based on the current assumptions and beliefs of the Matsushita Group in light of the information currently available to them, and involve known and unknown risks, uncertainties, and other factors. Such risks, uncertainties, and other factors include, in particular, the factors set forth in "Item 3.D: Risk Factors" of MEI's Annual Report on Form 20-F dated July 24, 2001 which has been filed with the U.S. Securities and Exchange Commission. Such risks, uncertainties and other factors may cause the Matsushita Group's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. MEI undertakes no obligation to publicly update any forward-looking statements after the date of this press release.