Panasonic tumbles as brokers downgrade on warning
Shares in Japan’s Panasonic Corp tumbled nearly 9 percent on Monday
after the Japanese electronics maker’s bigger-than-expected loss
forecast triggered some brokerages to cut their ratings on the stock.
Earnings at the company, which vies with Sony Corp for the title of
the world’s largest consumer electronics maker, have evaporated as the
global economic crisis cuts sales of flat TVs and digital cameras.
Panasonic, the world’s No.1 plasma TV maker ahead of Samsung
Electronics, said on Friday it expected a net loss of 195 billion yen
($2 billion) for the year to March, 86 percent larger than a consensus
in a poll of 17 analysts by Thomson Reuters.
It would be about half the size of the 378.96 billion yen loss it
posted a year earlier. Like many other Japanese companies, it has
suffered an additional blow as a stronger yen has cut profits on
products sold overseas.
“We think that improvement in the operating environment will take
time,” Nikko Citi analyst Kota Ezawa said in a note to clients, adding
Panasonic also faces risks from write-downs on equities and fixed
assets. He also said a planned purchase of Sanyo Electric would hurt its
balance sheet, as he cut his rating on Panasonic shares to “Sell/High
Risk” from “Hold/High Risk”.
Nomura Securities also downgraded the stock, to “Neutral” from “Buy”.
Panasonic shares were down 7.4 percent at 1,348 yen in the early
afternoon after falling as much as 8.8 percent, underperforming a 4
percent fall in Tokyo’s electrical machinery index.
Some industry specialists, however, chose to focus on Panasonic’s
midterm growth potential, rather than near-term concerns such as the
larger-than-expected net loss forecast this year.
Credit Suisse analyst Koya Tabata raised his target price for
Panasonic to 1,600 yen from 1,400 yen while maintaining an “outperform”
rating.
“Assuming there will be a V-shaped recovery in the medium to long
term, we regard now as a good time to accumulate shares,” Tabata wrote
in a note to clients dated Friday. “We believe Panasonic set the stage
for growth by expanding its market share in the new low-end market.”
With a potential customer base growing in emerging markets and more
consumers moving downmarket in industrialised nations, Panasonic plans
to put more resources on developing and marketing lower-end products,
Panasonic President Fumio Ohtsubo said on Friday.
Mizuho Investors Securities analyst Nobuo Kurahashi said Panasonic
has a wide range of businesses that could drive its midterm growth such
as green energy and overseas white goods operations, while it is unclear
how Sony’s focus on networked electronics will help boost its earnings.
Panasonic plans to spend up to 800 billion yen to buy Sanyo, the
world’s largest maker of rechargeable batteries used in PCs, cellphones
and hybrid cars, while Sony aims to make 90 percent of its electronics
products network-enabled and wireless-capable.
REUTERS |