Panasonic swings back to profit

Struggling Panasonic said Tuesday it swung back into the black for the April-June quarter as it cut costs to restructure its business while battling the negative effects of a strong yen.

The consumer electronics giant, which suffered a massive loss in its last fiscal year, logged a net profit of 12.8 billion yen ($164 million), reversing a shortfall of 30.4 billion yen for the three months last year.

Sales fell 6.0 percent to 1.81 trillion yen but operating profit surged to 38.6 billion yen from 5.6 billion yen a year ago, the Osaka-based firm said.

"Despite a sales decline and yen appreciation, these results were due to mainly to fixed cost reductions and streamlining of material costs," the company said in a statement.

Panasonic also credited a jump in domestic demand following last year's quake-tsunami disasters, which hurt manufacturers' operations and dampened consumer sentiment.

"However, the home electronics market, especially flat-panel TVs, continued to be very difficult," it added.

Panasonic left unchanged its full-year forecast, projecting it would return to the black in the current fiscal year to March 2013 with a net profit of 50 billion yen.

For the previous fiscal year, Panasonic suffered a record 772.2 billion yen net loss, one of the worst-ever losses for a non-financial Japanese firm.

Panasonic shares jumped 4.59 percent to 546 yen in Tokyo trade on Tuesday, with its quarterly results published after the closing bell.

As the massive firm tries to revive its flagging fortunes, Japanese media have reported that Panasonic may halve its 7,000-strong headquarters as part of a bid to streamline its operations.

Panasonic, like its rival Sony which posted a record 456.66-billion-yen annual loss, has long suffered in its television business and its debt also soared due to the purchase of smaller rival Sanyo.

Panasonic president Fumio Ohtsubo announced he would step down following the massive losses, which sent the company's shares to 30-year lows.

Japan's electronics sector has been badly hit by the appreciation of the yen, which makes exporters' products less competitive overseas, while falling prices and slow demand at home have also eaten into profits.

Competitors including South Korea's Samsung and US-based Apple are offering stiff competition, with high resolution display technology a key battleground as demand intensifies for smartphones, tablet computers and other gadgets.

Panasonic has already announced a major restructuring of its liquid crystal display manufacturing division, and is reportedly considering shifting all of its mobile phone handset production overseas amid high costs at home.

In June, Panasonic and Sony announced they would team up to develop televisions with advanced technology, in a bid to claw back market share from overseas rivals.

Despite a long-standing rivalry, the firms said they would aim to establish mass-production technology for organic light-emitting diode (OLED) television panels next year.