TOKYO (Reuters) - Panasonic maker Matsushita Electric Industrial Co Ltd 6752.T posted a surprise 3 percent gain in quarterly operating profit on cost cuts and strong sales of cameras and TVs, but cited fears about the U.S. economy and kept its full year outlook unchanged.
Matsushita, like rivals Sony Corp 6758.T and Canon Inc 7751.T, has enjoyed brisk global demand for digital cameras and it has also profited from growing plasma TV sales as consumers trade in their boxy old tube sets for thin screens.
The company, the world’s largest maker of consumer electronics by sales, said the profit gain was helped by a weaker yen and cost-cutting as it moved to offset soaring price of crude oil and other raw materials.
Group operating profit at Matsushita was 146.1 billion yen in July-September, up from 142.27 billion yen a year earlier and handily beating a consensus of 135.4 billion yen in a survey of three analysts by Reuters Estimates.
Matsushita's 3 percent profit gain compares with a 12 percent jump in quarterly operating profit by Samsung Electronics Co Ltd 005930.KS and a 15-fold jump in net profit at LG Electronics Inc 066570.KS, both of which enjoyed strong demand for displays and phones.
“From an operating profit point of view it looks very strong,” said Macquarie Research analyst David Gibson.
Citing the oil price and uncertainty over the course of the U.S. economy, Matsushita left its operating profit forecast for the full year to March unchanged at 477 billion yen, slightly below a consensus of 479.9 billion yen in a poll of 16 analysts by Reuters Estimates.
Gibson said Matsushita, a sprawling conglomerate whose businesses include home appliances, lighting equipment and prefabricated homes, would likely be in a better position than some of its rivals to weather any downturn in U.S. demand.
“There probably is a deterioration to some degree in demand in the second half, which clouds any consumer electronics-related company,” Gibson said.
“But given the diversification...it is not as sensitive to a consumer slowdown in the United States as say Sony,” he said.
NO SUBPRIME IMPACT, YET
Matsushita said it has so far felt little impact on consumer spending from turmoil in the U.S. housing market.
“I haven’t seen subprime loan problems impacting year-end demand from the United States and other parts of the world for our products,” Matsushita President Fumio Ohtsubo said.
“But there is a chance that this matter will affect our business and we’ll keep a close watch.”
Ohtsubo said he has no plan to change Matsushita’s targets to sell 5 million units of plasma TVs and 4 million LCD TVs in the current business year.
Matsushita, the No.1 plasma TV maker ahead of Samsung Electronics Co Ltd 005930.KS and LG Electronics Inc 066570.KS, launched this year the world's first full high-definition 42-inch plasma TV, to tap demand for high-resolution images.
Full high-definition plasma TVs with 50-inch or larger panels are widely available, but it is difficult and often costly to pack the technology into smaller models.
In its LCD TV business, Matsushita in September launched a 37-inch model, relaxing a long-standing policy of covering demand for 37-inch and larger flat TVs with plasma models, in an effort to reach a wider range of customers.
On a net basis, Matsushita’s profit fell 17 percent to 65.8 billion yen, reflecting costs related to an early retirement scheme and the absence of special gains booked a year earlier on the sale of investments.
Matsushita’s bottom line was also hit by costs for replacing mobile phone batteries.
Nokia NOK1V.HE, the world's largest mobile phone maker, warned consumers in August that 46 million batteries made by Matsushita and used in its cell phones could overheat and offered to replace them for free.
Quarterly sales rose 1 percent to 2.29 trillion yen.
Prior to the earnings announcement, shares in Matsushita closed up 1.4 percent at 2,110 yen, outperforming the Tokyo stock market's electrical machinery index .IELEC.T, which fell 0.7 percent.
Matsushita’s stock fell 12.4 percent in the year to Monday, while the sub-index lost 3.8 percent.
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