TOKYO Sony Corp's (6758.T) shares slid more than 3 percent to a 3-1/2-month low on Wednesday after quarterly profit fell more than expected, while rival Matsushita Electric Industrial's (6752.T) stock jumped 6 percent on robust earnings growth.
The sharp contrast underscores Matsushita's greater success in coping with tough price competition, soaring raw materials costs and other hurdles facing the consumer electronics industry.
Matsushita, which makes Panasonic-brand goods, has also been given high marks by investors for restructuring steps such as selling down its stake in struggling electronics maker Victor Company of Japan 6792.T, commonly known as JVC.
Sony, meanwhile, may need to sharpen the focus of its operations, which range from electronics to movies to insurance, some analysts say.
"Matsushita's cost-competitiveness has been improving, helped in part by removing JVC from its consolidated base," said Yoku Ihara, an investment information manager at Retela Crea Securities. "Sony management has not been able to control its diversified business operations."
Nomura Securities lifted its rating on Matsushita to "buy" from "neutral", saying Matsushita's quarterly results were "outstanding" given the current macroeconomic climate.
Sony's shares fell 3.6 percent to 4,050 yen, while Matsushita's shares were up 6 percent at 2,310 yen in afternoon trade. The benchmark Nikkei .N225 was up 1.3 percent.
Hurt by sluggish mobile phone sales and price competition, Sony said on Tuesday its group net profit came to 35 billion yen ($324 million) in April-June, down 47 percent from a year earlier and below the average estimate of 52.5 billion yen from three analysts polled by Reuters Estimates.
It also lowered its group net profit forecast for the year to March by 17 percent.
Matsushita, which reported an 86 percent rise in quarterly net profit, said it saw strong sales of its Viera flat TVs worldwide, adding that it was on track to meet its annual flat TV sales target of 11 million units.
Matsushita reiterated its forecast for net profit to rise 10 percent to 310 billion yen in the year to March, which compares with a market consensus of 300 billion yen.
Fujio Ando, senior managing director at Chibagin Asset Management said Matsushita's better earnings performance was in part due to its strategy of sticking to creating and manufacturing goods on its own.
Sony, however, seems to have become in some areas a simple assembler of goods, he said.
"Like seen in flat-TV panel production, Sony seems to have given up some of core manufacturing activities."