Panasonic posts $6.77bn net loss

Embattled Japanese electronics giants Panasonic and Sharp on Friday racked up more than $11 billion in combined losses over the nine months to December, and warned there was more bleeding to come. The battered sector has suffered from problems including a high yen, slowing demand in key export markets, fierce competition notably in the television market, and strategic mistakes that left companies' finances in ruins. Panasonic and Sony have been hammered by credit downgrades and record losses, while century-old rival Sharp warned last year that its survival was at stake. It put up its Osaka headquarters as collateral for life-saving bank loans. On Friday, the maker of Aquos-brand electronics said its losses doubled in the nine months to December to $4.6 billion, while Panasonic said it lost about $6.77 billion over the same period, and was on track to lose a whopping $8.3 billion in the fiscal year to March. But Sharp insisted its massive corporate overhaul, including thousands of job cuts, would now keep it from going under. It said in a statement that its troubles "will not cast a material uncertainty about Sharp's ability to continue as a going concern". The company also offered a glimmer of hope, as it eked out a small operating profit of 2.6 billion yen in the third quarter, although it still posted a net loss of 424.35 billion yen over the nine-month period. It left unchanged a forecast for a full-year net loss of 450 billion yen. Panasonic said it logged a nine-month operating profit of 121.95 billion yen, despite its whopping net loss, saying the positive result was due "mainly to fixed cost reductions and streamlining material costs". Weak demand for flat-panel televisions, however, helped push total sales down 8.8 percent to 5.44 trillion yen, it added. Like its domestic rivals, Panasonic was sideswiped by slumping sales on the back of the global slowdown while it also took on huge restructuring costs, which contributed heavily to its bleeding bottom line. In November, ratings agency Fitch downgraded Panasonic and Sony to junk status for the first time. Fitch also cut Sharp to junk in the same month, which followed a similar move by Standard & Poor's earlier in the year. Ratings agencies have pointed to the trio's weak balance sheets and declining position in the global electronics sector. The downgrades meant their debt was no longer considered a safe investment for portfolio managers. Sony -- whose shares last year dipped below 1,000 yen for the first time since 1980 and the era of the Walkman -- has said it expects to reverse four years of losses with a small net profit in the year to March. The company reports its earnings next week. The industry giants have suffered acutely in their television divisions as they faced falling prices and ran up against fierce competition from South Korean and Taiwanese rivals. Sharp on Friday pointed to weak demand at home for its liquid-crystal-display televisions while a Chinese consumer boycott of Japanese brands also weighed, due to a territorial spat between Beijing and Tokyo. Sharp has embarked on a painful restructuring including thousands of job cuts and slashed wages for employees, from the factory floor to the boardroom. It has also pursued tie-ups with domestic and foreign firms, including a 9.9 billion yen capital injection deal with US chipmaker Qualcomm. Sharp shares surged 5.78 percent to close at 329 yen, while Panasonic slipped 1.0 percent to 592 yen on Friday. The firms released their results after markets had closed. Investors fled the sector last year, with Sharp's stock losing 55 percent in 2012, while Sony lost 30 percent and Panasonic fell 20 percent, as Tokyo's benchmark Nikkei 225 index soared almost 23 percent.