Tags: Panasonic | Shares | Earnings | Estimates

Panasonic Shares Surge After Earnings Beat Estimates

Tuesday, 04 February 2014 08:51 PM

Shares of Panasonic Corp., Japan’s biggest maker of consumer electronics, surged the most since 1981 after the company posted third-quarter profit that was 68 percent higher than analyst estimates.

The stock rose as much as 18 percent to 1,249 yen in Tokyo trading Wednesday morning after at least two brokerages raised their ratings. Net income rose 20 percent to 73.7 billion yen ($730 million), compared with the 44 billion-yen average estimate of three analysts surveyed by Bloomberg News.

President Kazuhiro Tsuga, in his second year at the helm, is pivoting toward products for cars and homes as he accelerates changes to recover from back-to-back annual losses. Panasonic suspended plasma panel production, trimmed smartphone and circuit board operations and sold a stake in chip factories to focus on growing businesses.

“Management plans to bring restructuring further forward,” Mika Nishimura, an analyst at Mitsubishi UFJ Morgan Stanley Securities Co., said in a report as the stock was raised to outperform from neutral. “Combined with sales growth mainly from automotive products, this could boost earnings sooner than we expected.”

Operating profit at the automotive and industrial systems unit, the company’s biggest that handles products such as car entertainment systems and batteries, was 28.2 billion yen in the three months ended December, the company said. That compares with a loss of 800 million yen the year before.

Profit at the audio-visual product division was 10.1 billion yen, compared with a loss of 10.9 billion yen a year earlier.

The appliances unit recorded profit that rose 60 percent to 9.8 billion yen from a year earlier.

“We’re promoting reform much faster than we had originally planned,” Chief Financial Officer Hideaki Kawai said Tuesday. “We won’t slow down.”

The company, which makes products ranging from eyelash curlers to solar panels and car-navigation systems, eliminated 32,000 jobs as of September from a year earlier. Tsuga, who took control in June 2012, said he plans to eliminate unprofitable divisions by March 2016.

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Shares of Panasonic Corp., Japan's biggest maker of consumer electronics, surged the most since 1981 after the company posted third-quarter profit that was 68 percent higher than analyst estimates.
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2014-51-04
Tuesday, 04 February 2014 08:51 PM
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