Japanese firms downgrade profit outlooks on falling demand, China row

Japanese bellwether firms downwardly revised their full-year revenue estimates on Wednesday, citing growing pressure from the global economic slowdown, waning consumer demand and the impact of deteriorating ties with China. Panasonic Corporation said Wednesday it predicts losses of 765 billion yen (9.6 billion U.S. dollars) for this business year to March and may be heading to its fourth net loss in five years. The latest figure from the Osaka-based consumer electronics maker is a stark reversal from its previous forecast of a 50 billion yen (642 million U.S. dollars) profit, with the amount nearing last year's loss of 772 billion yen -- an all time high for the company. TV TURMOIL "It's unfortunate, but we are among the losers in consumer electronics," the company's President Kazuhiro Tsuga told a news conference earlier in Tokyo. "The fundamental factor for the downswing lies in a slump in the mainline business," said Tsuga, who became the company's president this year. Tsuga said he plans a massive overhaul for the company starting next March to steer the ailing firm back to profitability. Having incurred huge losses from slumping global demand for flat-screen TVs and Blu-ray disc recorders, Panasonic also slashed its annual operating profit target to 140 billion yen from 260 billion yen. Japan's second-largest TV maker cut its annual projection for TV sales to 13 million units from 15.5 million. Panasonic, who cut 36,000 jobs last year, said it plans to cancel its smartphone operations in Europe and scale back its mobile terminal business. The firm also said it will defer its tax assets as another cost-saving endeavor. The maker of Viera TVs also said that Japan's territorial feud with China over the contested Diaoyu Islands in the East China Sea has cost the firm around 100 billion yen (1.25 billion dollars) this year, due to Chinese consumers boycotting Japanese goods and services. Toshiba Corporation has also suffered from waning global and domestic demand for TVs and cut its full-year operating profit forecast by 13 percent to 260 billion yen (3.3 billion dollars) on Wednesday. Citing downward pressures from the eurozone debt crisis, a strong yen and a slowdown inemerging economies, the firm also revised down its estimate of consolidated net profit for the year by 18.5 percent to 110 billion yen (1.35 billion dollars) from a previous estimate of 135 billion yen. Toshiba said it had slashed its TV sales target by 19 percent to 13 million units and added it had logged a 3.6 billion yen loss in its digital products in the half year ending September, due to falling demand for TVs locally. TURBULENT SKIES Meanwhile, All Nippon Airways cut its revenue forecast for the year to 1.47 trillion yen from the 1.50 trillion yen it predicted in April, due to a slowdown in the global economy and falling patronage since Japan's illegal attempts to "nationalize" the Diaoyu Islands on Sept 11. "There is a risk the Japanese economy will be subjected to downward pressure due to the growing sense of a slowdown in the global economy, rising oil prices, volatile exchange rates and anti-Japanese demonstrations in China," ANA said. "Considering the impact of the anti-Japanese demonstrations in China on international passenger revenue, operating revenue is expected to be approximately 30 billion yen less than the earlier projection," said the firm. The carrier's net profit, however, totaled 36.93 billion yen ( 465 million dollars) in the six months to September, on a 6.9 percent jump in revenue on-year to 753.21 billion yen. ANA's operating profit also climbed 50.2 percent to 75.30 billion yen, thanks to solid earnings from its budget carrier AirAsia Japan Co. and cost cutting endeavors.