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Sony and Panasonic market values decline to 30-year low

China Daily | Updated: 2012-06-04 08:03

Sony and Panasonic market values decline to 30-year low

Tourists from China outside a Laox Co shop in the Akihabara district of Tokyo. Tokyo-based Sony has posted a record annual net loss of $6.4 billion. Provided to China Daily

Sony Corp and Panasonic Corp, Japan's biggest consumer-electronics makers, saw their market value plummet to their lowest levels in three decades last month after forecasting earnings that missed estimates because of a failure to end losses from TV sets.

Sony, the world's No 3 TV maker, slid to the lowest since August 1980. The maker of Walkman music players and Bravia TVs closed with a market value of $17.5 billion, compared with more than $100 billion in 2000. Panasonic, the world's largest maker of plasma TV sets, dropped to the lowest since January 1978, according to data compiled by Bloomberg.

The declines came after the companies said losses from their TV businesses will continue and as investors remained skeptical about predictions for returning to profit this year. Without hit products such as the compact-disc player of the 1980s, Sony and Panasonic have lost ground to Samsung Electronics Co and LG Electronics Inc in TVs and to Apple Inc's iPod.

"The Japanese companies need to develop unique and No 1 products to propel growth in the future," said Yuuki Sakurai, chief executive officer at Tokyo-based Fukoku Capital Management Inc, which manages $7.3 billion of assets. "At this point, I don't see any company in Japan that can do that."

Panasonic eliminated about 17,000 jobs after posting a record 772 billion yen ($9.7 billion) loss last year.

TV sales this year will drop 11 percent to 15.5 million units, while losses will continue for a fifth consecutive year, Panasonic said. The company's earnings targets "could be difficult to achieve, given restructuring costs and sluggish TV demand", Yasuo Nakane, a Tokyo-based analyst at Deutsche Bank AG, said before the announcement. "Targets should be realistic."

Osaka-based Panasonic made "excessive" investments in plasma and liquid crystal display TVs, President Fumio Ohtsubo told reporters. "We regret the decision we made."

Tokyo-based Sony is eliminating 10,000 jobs, about 6 percent of its workforce, as part of its restructuring.

By comparison, Samsung, based in Suwon, South Korea, the world's biggest maker of phones, chips and TVs, has gained 23 percent this year and is valued at $167 billion. Apple, based in Cupertino, California, with a market capitalization of $530 billion, has jumped 40 percent in New York trading this year.

Global TV shipments last year fell for the first time in six years because of excessive inventory in the United States and Europe and the end of Japanese government subsidies for purchases, according to DisplaySearch, part of NPD Group. Shipments fell 0.3 percent to 247.7 million units, the researcher said.

Both Panasonic, the maker of Lumix cameras, and Sony, whose businesses include films, insurance, music and game consoles, have changed their leadership.

Bloomberg News in Tokyo

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