Main / Articles: Sanyo reports loss on mobile phone, digital camera sales

Sanyo Electric Co., the troubled Japanese electronics giant undergoing a three-year restructuring plan, reported a first-quarter net loss of 26.2 billion yen ($233.9 million) Wednesday on falling sales of digital cameras and mobile phones.

The red ink for the three months to June 30 compared with profit of 2.33 billion yen ($20.8 million) a year earlier, the company said today in a statement. Osaka-based Sanyo, which announced a sweeping revival push earlier this month calling for massive job cuts, is trying to dig out from an unexpected loss last year brought on by tumbling prices and damage from an earthquake.

Sales fell 8.6 percent to 569 billion yen ($5.08 billion) in the first quarter, from 662.4 billion yen ($5.19 billion), thanks to poor showings for consumer electronics and components such as rechargeable batteries and semiconductors.

Falling prices and tougher competition drove sales of gadgets such mobile phones and digital cameras down 12.2 percent in the quarter, while sales of solar batteries and computer chips dropped 7.5 percent, the company said.

Domestic sales, which accounted for 47 percent of overall revenue in the first quarter, fell 15 percent, while overseas sales dropped 1.8 percent.

Sanyo announced a turnaround plan on July 5 calling for cutting 14,000 jobs, or 15 percent of its global workforce, slashing domestic factory space by about a fifth, discontinuing some lines, and cutting debt by about half.

The company also appointed a new management team in April to revive the company after it posted a net loss of 171.5 billion yen ($1.53 billion) in the year just ended. The company had earlier forecast a profit of 14 billion yen for the year but scrapped the outlook after a 6.8-magnitude earthquake struck its semiconductor plant in northern Japan last October.

Sanyo kept its forecast unchanged for the current fiscal year to March 2006. It is predicting a net loss of 92 billion yen on sales of 2.49 trillion yen, nearly flat from last year.

Article source: mdn.mainichi-msn.co.jp

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