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MATSUSHITA ELECTRIC POSTS THIRD-QUARTER AND 9-MONTH SALES GAINS; EXTERNAL ECONOMY, INVESTMENTS AND MCA PURCHASE COSTS CUT EARNINGS

 MATSUSHITA ELECTRIC POSTS THIRD-QUARTER AND 9-MONTH SALES GAINS;
 EXTERNAL ECONOMY, INVESTMENTS AND MCA PURCHASE COSTS CUT EARNINGS
 OSAKA, Japan, Feb. 25 /PRNewswire/ -- Matsushita Electric Industrial Co., Ltd. (NYSE: MC) reported today that its consolidated sales for the third quarter and nine months ended Dec. 31, 1991, grew by 12 percent and 13 percent, respectively.
 The company said, however, that earnings for both periods were restricted by the external economy, its own R&D and capital investments in future growth, and costs of its 1990 acquisition of MCA INC., whose results it now includes on a one-quarter lag basis relative to MCA's December 31 fiscal year.
 The Matsushita group's net income for the third quarter was 52.4 billion yen (U.S. $419 million), down 38 percent from 84.2 billion yen in the third quarter last year. Operating profit was 134.7 billion yen ($1.08 billion), 11 percent less than 151.4 billion yen in the year-earlier quarter. Income before income taxes was 125.2 billion yen ($1.00 billion), a decline of 32 percent from the comparable 183.7 billion yen.
 Third quarter sales rose 12 percent to 2,005.1 billion yen ($16.04 billion), compared with 1,784.3 billion yen in the third quarter of the previous fiscal year.
 Matsushita said that sales growth was achieved despite the prevailing market environment, which was marked by ongoing slow European and U.S. economic growth, as well as decreased housing starts and slower private capital investment and consumer spending in Japan, and that it also reflected the inclusion of the results of MCA, beginning this fiscal year.
 For the nine months, Matsushita's consolidated net income was 130.1 billion yen ($1.04 billion), a decline of 38 percent from 211.1 billion yen in the like year-earlier period. Operating profit slipped 10 percent to 336.1 billion yen ($2.69 billion) from the comparable 375.0 billion yen. Income before income taxes was 322.7 billion yen ($2.58 billion), down 30 percent from the previous nine-month total of 463.8 billion yen.
 Nine-month sales registered a 13 percent advance to 5,672.8 billion yen ($45.38 billion) from 5,031.4 billion yen in the corresponding period a year ago. Third-quarter net income per common share was 23.78 yen (equal to $1.90 per American Depositary Share |ADS~), versus 37.99 yen per common share a year ago.
 Nine-month income per common share was 59.15 yen per common share ($4.73 per ADS), compared with the year-earlier 95.59 yen per common share.
 The company noted that, despite major efforts to reduce manufacturing costs, operating profit was off because of the rising yen, heightened industry competition and Matsushita's high level of future- oriented investments, such as increased spending on R&D and higher capital investment depreciation.
 Management said that high anticipated costs associated with the MCA acquisition, including interest expenses and amortization of goodwill, coupled with the factors mentioned above, brought about the decreases in its pre-tax and net income.
 Third quarter domestic sales grew 5 percent to 1,049.5 billion yen ($8.40 billion). Overseas sales climbed 22 percent to 955.6 billion yen ($7.65 billion), reflecting solid growth in Asia and the Middle East, as well as the inclusion of MCA results.
 Sales of major product categories in the third quarter were as follows:
 Video equipment sales were virtually level with those of the previous year, as Matsushita's large-size, flat-screen color TVs with satellite broadcast tuners joined its handheld camcorders in continued favorable growth, while demand for table-top VCRs decreased, especially in overseas markets.
 Audio equipment sales posted gains of 6 percent, on domestic and overseas increases in portable CD radio-cassette players, compact headphone cassette players and car audio products.
 A 9 percent increase in sales of home appliances was achieved through favorable growth in many Matsushita appliance lines, most notably in air conditioners and washing machines.
 Communication and industrial equipment had sales growth of 6 percent. Personal-use mobile telephones continued to grow well, and a number of information equipment lines kept up their steady overseas progress, but negative domestic market conditions resulted in decreases in factory automation equipment and information equipment sales.
 Sales growth of electronic components was held to 1 percent by severe market conditions which affected semiconductors as well as passive and other electronic components.
 Batteries and kitchen-related products registered a 7 percent gain as sales of compact, high-performance batteries like nickel-cadmium and lithium cells had strong growth.
 Matsushita's new "Entertainment" category had third quarter sales of 184.4 billion yen ($1.48 billion), mainly representing the newly consolidated sales of MCA. The company made no comparison with the previous third quarter, but noted that certain audio-video software products formerly included in "Video equipment" and "Other" have been transferred to "Entertainment."
 The current slowdown in domestic demand in Japan, lingering economic difficulties in the United States and Europe, and other factors have led Matsushita management to revise its earlier forecasts for the fiscal year ending March 31, 1992. The company today issued the following new projections:
 Consolidated fiscal year sales are now expected to rise 12 percent to about 7,360 billion yen (rather than the previous 14 percent increase to 7,540 billion yen). Operating profit is now seen at some 378 billion yen, down 20 percent (replacing 452 billion yen, down 4 percent). The pre-tax income forecast is now 340 billion yen, down 43 percent (instead of 463 billion yen, down 22 percent). The pre-tax projection includes allowances for bad debts of one of Matsushita's finance subsidiaries in Japan. Net income is now forecast at 132 billion yen, down 49 percent (rather than 183 billion yen, down 29 percent).
 For its parent company alone, Matsushita says it now expects sales of about 4,930 billion yen, up 5 percent (replacing the previous forecast of 4,960 billion yen, up 6 percent); operating profit of 130 billion yen, down 16 percent (replacing 143 billion yen, down 8 percent); recurring profit of 200 billion yen, down 28 percent (replacing 220 billion yen, down 20 percent) and net income of 118 billion yen, down 23 percent (replacing 124 billion yen, down 19 percent).
 Matsushita Electric Industrial Co., Ltd. is Japan's largest manufacturer of consumer electric and electronic products. The company's stock trades on the New York and Pacific Stock exchanges and is also listed outside Japan on the Amsterdam, Dusseldorf, Frankfurt and Paris stock exchanges. Its products are marketed around the world under the "Panasonic," "National," "Technics" and "Quasar" brand names.
 MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD.
 Consolidated Statement of Income(A)(B)(C)
 Three months
 ended Dec. 31: 1991 1990 1991/1990 1991
 Yen US$(D)
 (Billions) Percentage (Millions)
 Sales 2,005.1 1,784.3 112 $16,041
 Operating profit 134.7 151.4 89 1,078
 Income before
 income taxes 125.2 183.7 68 1,002
 Provision for
 income taxes 67.5 90.5 75 540
 Net income 52.4 84.2 62 419
 Net income per
 common share 23.78 yen 37.99 yen 19 cents
 Net income per
 American Depositary
 Share(E) 237.8 yen 379.9 yen $1.90
 Nine months ended
 Dec. 31: 1991 1990 1991/1990 1991
 Yen US$(D)
 (Billions) Percentage (Millions)
 Sales 5,672.8 5,031.4 113 $45,382
 Operating profit 336.1 375.0 90 2,689
 Income before
 income taxes 322.7 463.8 70 2,582
 Provision for
 income taxes 175.1 228.8 77 1,401
 Net income 130.1 211.1 62 1,041
 Net income per
 common share 59.15 yen 95.59 yen 47 cents
 Net income per
 American Depositary
 Share(E) 591.5 yen 955.9 yen $4.73
 Notes to consolidated financial statements:
 (A) -- Operations of MCA INC. from July 1 through Sept. 30, 1991, are included in the company's consolidated financial results for the third fiscal quarter, on a one-quarter lag basis relative to MCA's fiscal year, which ends December 31. Nine-month MCA results are included in the company's consolidated nine-month results on the same basis.
 (B) -- Number of consolidated companies: 300
 (C) -- Number of companies reflected on the equity method: 142.
 (D) -- United States dollar amounts are translated for convenience at the rate of U.S. $1.00 equals 125 yen.
 (E) -- Each American Depositary Share (ADS) represents 10 shares of common stock.
 Matsushita Electric Industrial Co., Ltd.
 Consolidated Sales Breakdown(AA)
 Yen US$(D)
 (Billions) Percentage (Millions)
 Three months ended
 Dec. 31: 1991 1990 1991/1990 1991
 Video equipment 490.9 489.9 100 $ 3,927
 Audio equipment 184.6 173.8 106 1,477
 Home appliances 254.8 234.4 109 2,038
 Communication and
 industrial equipment 405.9 384.1 106 3,247
 Electronic components 231.9 228.7 101 1,856
 Batteries and kitchen-
 related products 106.6 99.5 107 853
 Other 146.0 154.3 95 1,168
 Entertainment 184.4 19.6 -- 1,475
 Total 2,005.1 1,784.3 112 $16,041
 Domestic sales 1,049.5 1,003.5 105 8,396
 Overseas sales 955.6 780.8 122 7,645
 Yen US$(D)
 (Billions) Percentage (Millions)
 Nine months ended
 Dec. 31: 1991 1990 1991/1990 1991
 Video equipment 1,330.4 1,315.9 101 $10,643
 Audio equipment 487.8 465.1 105 3,902
 Home appliances 757.8 700.7 108 6,062
 Communication and
 industrial equipment 1,237.2 1,146.2 108 9,897
 Electronic components 659.7 646.0 102 5,278
 Batteries and kitchen-
 related products 285.1 267.5 107 2,280
 Other 445.5 441.5 101 3,565
 Entertainment 469.3 48.5 -- 3,755
 Total 5,672.8 5,031.4 113 $45,382
 Domestic sales 2,948.4 2,749.5 107 23,587
 Overseas sales 2,724.4 2,281.9 119 21,795
 (AA) -- Beginning with the current fiscal year, a new product category, "Entertainment," was added to the company's consolidated results. Accordingly, certain video and audio software products previously included in "Video equipment" and "Other" have been transferred to the new "Entertainment" category.
 Figures for 1990 have been restated to reflect these transfers.
 (Details of product categories)
 Video equipment (video cassette recorders and related
 equipment, color TV, etc.)
 Audio equipment (radios, radio/cassettes, tape recorders,
 CD players, stereo equipment, etc.)
 Home appliances (refrigerators, air conditioners, home
 laundry equipment, microwave ovens, vacuum
 cleaners, heaters, etc.)
 Communication and
 industrial equipment (office automation equipment, communication
 equipment, welders, robots, air
 conditioning equipment, etc.)
 Electronic components (semiconductors, tubes, tuners, speakers,
 etc.)
 Batteries and kitchen-
 related products (dry batteries, storage batteries, gas
 appliances, kitchen fixture systems, solar
 energy equipment, etc.)
 Other (bicycles, photographic equipment, imported
 materials and products, and others.)
 Entertainment (filmed entertainment, music entertainment,
 pre-recorded video and audio tapes and
 discs, etc.)
 NOTE: Dollar amounts for 1991 only in the following have been translated for convenience at the rate of U.S. $1.00 equals 125 yen./
 -0- 2/25/92
 /CONTACT: Stan Igaki of Panasonic Finance, 212-371-4116/
 (MC) CO: Matsushita Electric Industrial Co. ST: IN: SU: ERN


TS -- NY015 -- 2207 02/25/92 09:09 EST
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