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Panasonic rebounds after largest loss by Japan manufacturer

The electronics manufacturer booked a small quarterly profit and said it's on the recovery track

Panasonic said Tuesday it squeezed out a small profit in the April-June quarter, rebounding from a US$10 billion loss last fiscal year, the largest ever by a Japanese manufacturer.

The Osaka-based company said it booked a ¥12.8 billion (US$160 million) profit in the period, a tiny sliver of its ¥1.8 trillion in sales, but enough to keep it on track for a profitable year through March 2013.

Panasonic said sales at its electronics division fell 20 percent, but it was able to book an operating profit after being in the red last year, when the massive earthquake and tsunami that struck in March weighed on its results. The company said its profitability in the division was mainly due to reducing fixed costs and restructuring. Sales of laptops were better than a year earlier, while revenue from TVs and digital recorders slipped.

The company's core appliance division, which includes refrigerators and washing machines, remained a steady source of profit. Panasonic also made progress on turning around its device business, which makes semiconductors for other products, swinging back into the black through cost cutting even as sales fell.

In May, Panasonic said it booked large one-time restructuring losses and tax expenses that led to the historic loss during the last fiscal year, but it also saw revenue fall by 10 percent during the period. Operating profit, which some see as a measure of actual business performance, fell 86 percent.

The US$10 billion loss was the largest ever by a Japanese manufacturing company, according to Kyodo News agency and local newspapers.

Panasonic is in the midst of a restructuring plan that includes closing TV production lines, reducing headcount, and reshuffling its wide range of businesses. The company is trying to rebrand itself as an environmentally friendly electronics company, focusing on its solar power and rechargeable battery businesses as well as highlighting the low power consumption of its products.

The company's fiscal year runs from April to March.


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