Panasonic set to book $3.9 billion annual loss: source

By Kentaro Hamada and Sachi Izumi

TOKYO (Reuters) - Japan's Panasonic Corp is set to book a $3.9 billion annual net loss, a source with knowledge of the matter said on Monday, as the electronics maker suffers slumping demand and growing costs for plant closures and other streamlining steps.

A net loss by Panasonic -- its first in six years -- would follow warnings of red ink from Sony Corp, Hitachi Ltd and other rival Japanese electronics makers, hit by the widening recession as well as a strong yen, which cuts earnings generated overseas.

Shares in Panasonic outperformed its sector peers, however, as investors took the prospect of a massive loss as a sign that the maker of Viera TVs and Lumix digital cameras is pressing ahead with aggressive restructuring.

"Panasonic has an excellent cost-cutting abilities and was seen as healthier than rivals even in the downturn," Mizuho Investors Securities analyst Nobuo Kurahashi said.

"If we can see the company acting swiftly when others are falling into big losses, it's not bad news."

Panasonic, the world's No.1 plasma TV maker, is widely seen as having a competitive cost structure as it has already been through a major streamlining including a headcount reduction and reshuffling of its business portfolio.

The source, who spoke on condition of anonymity because the information is not yet public, confirmed a report by the Yomiuri newspaper that Panasonic faces a loss of 350 billion yen for the business year ending in March.

The company forecast a net profit of 30 billion yen in November, revised down from its previous projection of a 310 billion yen profit. It posted a net profit of 282 billion yen last business year.

Panasonic, formerly known as Matsushita Electric Industrial Co, said in a statement it did not announce the reported figure and will disclose its third-quarter results on February 4, which may or may not include a revision to its earnings forecast.

The Nikkei business daily also reported that Panasonic's operating profit will plunge about 90 percent to 70 billion yen this business year. In November, Panasonic forecast a 340 billion yen profit.

The Osaka-based electronics maker said in November it expects restructuring costs this business year of 155 billion yen as it consolidates plants and closes unprofitable operations.

Panasonic is closing a dry battery plant in the Philippines and an electronic component factory in Malaysia. It is also consolidating its two other Malaysian parts plants into one.

Shares in Panasonic ended Monday trade down 3.1 percent at 1,065 yen, outperforming the Tokyo stock market's electrical machinery index, which lost 3.7 percent.

In sharp contrast, Hitachi dived 17 percent to 244 yen after the electronics conglomerate said on Friday it expected to post a record net loss of 700 billion yen for the year to March 31.

That would be the biggest ever loss by a Japanese manufacturing company.