[TODAY'S TOP STORIES] from [The Japan Times]
[BUSINESS NEWS]
Friday, May 15, 2009
Sony logs \228 billion loss, sees more red ink
By HIROKO NAKATA
Staff writer
Sony Corp. suffered a record \227.78 billion group operating loss for the business year that ended on March 31, blaming plummeting global demand and the yen's surge against other currencies.
It was the first full-year operating loss for the electronics and entertainment giant in 14 years. Sony on Thursday also released a dim outlook for the current business year, saying it expects a \110 billion operating loss because the worldwide economic downturn will continue to create a harsh business environment.
The loss for business 2008 marked a sharp contrast with the \475.30 billion profit Sony posted the year before.
It logged a group net loss of \98.94 billion on sales of \7.73 trillion, against a \369.44 billion net profit on \8.87 trillion sales in the 2007 business year.
"The deterioration of the economy, triggered by the Lehman shock, made things extremely serious worldwide," Nobuyuki Oneda, Sony's chief financial officer, told reporters in Tokyo. He added that the yen's surge against major currencies and a tumble in Japanese share prices also hurt earnings.
The higher yen took about \968 billion out of Sony's sales and about \279 billion out of its operating profit. The yen's surge erodes profits earned overseas by Sony and other export-oriented manufacturers.
Oneda said Sony is ahead of schedule on its restructuring plan announced in December and January. The company said it has already slashed more than \300 billion in production and other costs from the previous year, against \250 billion it announced it would cut throughout the course of this business year.
Sony also said it has decided to close a total of eight plants at home and abroad, against its plan to cut about 10 percent of its 57 plants by next March. It also said it has completed its global 16,000-job restructuring plan announced in December.
Oneda said the firm will continue restructuring for the next few years, including job cuts, even though it has already reached its current goals.
But Sony, which is trailing Apple Inc., has no clear strategy to turn its fortunes around, and it expects its core electronics sector to lose even more money this year due to the higher yen and restructuring costs.
Panasonic loss
OSAKA (Kyodo), BLOOMBERG Panasonic Corp. is expected to log a group net loss of tens of billions of yen in business 2009, falling into the red for the second consecutive year due mainly to costs linked to restructuring its production bases, company sources said Thursday.
The company anticipates a \380 billion group net loss for business 2008, which ended in March. This would mark its first red ink in six years and a sharp turnaround from a net profit of \281.88 billion logged a year earlier.
Panasonic, formerly Matsushita Electric Industrial Co., joins a growing list of other electronics giants, including Toshiba Corp. and Hitachi Ltd., in projecting two consecutive years of net losses, with their earnings hit by weak sales and a stronger yen.
Panasonic anticipates its operating profit, which better reflects the performance of its core businesses, to be in the black for the current business year through next March, the sources said.
But a solid recovery in sales of its mainstay products, including flat-panel TVs and digital cameras, is expected to take more time amid the ongoing global economic downturn.
Panasonic expects to book heavy restructuring costs as it cuts 15,000 jobs worldwide by the end of next March and shutters 27 of its production facilities in Japan and overseas.
Meanwhile, Sanyo Electric Co., which is being acquired by Panasonic, announced Thursday it expects an increase in annual operating profit, beating analyst estimates.
Operating profit, or sales minus the cost of goods sold and administrative expenses, will probably triple to \25 billion in the 12 months to March 31, 2010, from \8.28 billion a year earlier, Sanyo said.
[BUSINESS NEWS]
Friday, May 15, 2009
NEC, Hitachi exit project for computer
(Kyodo News) NEC Corp. and Hitachi Ltd. said Thursday they will not participate in the manufacturing phase of a government-led project to develop next-generation supercomputers so they can cut costs amid deteriorating business conditions.
NEC, which incurred a group net loss of \296.65 billion in business 2008, which ended in March, would shoulder over \10 billion in research and development costs if it continued to participate in the project.
Hitachi, another key member of the project facing tough times, followed suit later Thursday, announcing separately that it will exit the supercomputer project.
With the two electronics giants leaving the project, the government will likely face a fundamental review of the project to develop the world's fastest supercomputers, which are expected to run at a maximum speed of 10 petaflops, or 10 quadrillion floating point operations, per second.
The project, led since 2006 by the Education, Sports, Culture, Science and Technology Ministry, is now at the final stage of detailed system design.
The government has so far invested about \115 billion in the project, which is expected to be completed by 2012.
Fujitsu Ltd. is also part of the project to develop the supercomputers, which can be used in simulating experiments for developing new drugs, predicting the paths of typhoons or studying the formation of galaxies.
NEC has been one of the global leaders in the field and plans to continue development of cutting-edge supercomputers even after it withdraws from the project.
The company made the Earth Simulator supercomputer, which the Japan Agency for Marine Earth Science and Technology uses for global warming projections.
Fujitsu CPU is fastest
Fujitsu Ltd. has developed the world's fastest central processing unit, becoming the first Japanese company in 10 years to claim the top spot, company officials said Wednesday.
The new CPU, called Venus, runs 2 1/2 times faster than the product of its rival, Intel Corp., according to the officials. Fujitsu last held the record for the world's fastest CPU in 1999.
Fujitsu's new CPU, often called the computer's brain, may be installed in a next-generation supercomputer that is planned to begin operation at Riken, the officials said.
[BUSINESS NEWS]
Friday, May 15, 2009
IHI to head offshore for shipbuilding components
(Bloomberg) IHI Corp. plans to increase imports of shipbuilding components to counter the yen's rise.
The heavy-machinery maker's IHI Marine United Inc. unit, which buys "most" of its components from domestic suppliers, plans to buy parts including pumps and motors from South Korea and other nations, Shigemi Kurahara, the subsidiary's incoming president, said, without specifying volumes and suppliers.
IHI forecast a 64 percent decline in shipbuilding operating profit this business year to \1 billion because of the stronger yen. The unit will review procurement to hedge currency risk and cut costs and will likely increase purchases from South Korea, where quality improvements in vessels and parts have boosted demand from global shipping lines, Kurahara, 60, said.
"We need a business structure that's less affected by factors beyond our own control," said Kurahara, who takes IHI Marine United's helm in June.
South Korean shipbuilders, now the world's largest, used to import Japan-made components, Kurahara said. The yards now make about 80 percent of the parts domestically, and IHI imports electrical cable from the country for its ships, he said.
"As far as our customers agree, we are putting overseas-made parts on ships we build," Kurahara said.
IHI assumes the yen will strengthen 7 percent to average \95 against the dollar for the year started April 1.
[BUSINESS NEWS]
Friday, May 15, 2009
Sony logs \228 billion loss, sees more red ink
By HIROKO NAKATA
Staff writer
Sony Corp. suffered a record \227.78 billion group operating loss for the business year that ended on March 31, blaming plummeting global demand and the yen's surge against other currencies.
It was the first full-year operating loss for the electronics and entertainment giant in 14 years. Sony on Thursday also released a dim outlook for the current business year, saying it expects a \110 billion operating loss because the worldwide economic downturn will continue to create a harsh business environment.
The loss for business 2008 marked a sharp contrast with the \475.30 billion profit Sony posted the year before.
It logged a group net loss of \98.94 billion on sales of \7.73 trillion, against a \369.44 billion net profit on \8.87 trillion sales in the 2007 business year.
"The deterioration of the economy, triggered by the Lehman shock, made things extremely serious worldwide," Nobuyuki Oneda, Sony's chief financial officer, told reporters in Tokyo. He added that the yen's surge against major currencies and a tumble in Japanese share prices also hurt earnings.
The higher yen took about \968 billion out of Sony's sales and about \279 billion out of its operating profit. The yen's surge erodes profits earned overseas by Sony and other export-oriented manufacturers.
Oneda said Sony is ahead of schedule on its restructuring plan announced in December and January. The company said it has already slashed more than \300 billion in production and other costs from the previous year, against \250 billion it announced it would cut throughout the course of this business year.
Sony also said it has decided to close a total of eight plants at home and abroad, against its plan to cut about 10 percent of its 57 plants by next March. It also said it has completed its global 16,000-job restructuring plan announced in December.
Oneda said the firm will continue restructuring for the next few years, including job cuts, even though it has already reached its current goals.
But Sony, which is trailing Apple Inc., has no clear strategy to turn its fortunes around, and it expects its core electronics sector to lose even more money this year due to the higher yen and restructuring costs.
Panasonic loss
OSAKA (Kyodo), BLOOMBERG Panasonic Corp. is expected to log a group net loss of tens of billions of yen in business 2009, falling into the red for the second consecutive year due mainly to costs linked to restructuring its production bases, company sources said Thursday.
The company anticipates a \380 billion group net loss for business 2008, which ended in March. This would mark its first red ink in six years and a sharp turnaround from a net profit of \281.88 billion logged a year earlier.
Panasonic, formerly Matsushita Electric Industrial Co., joins a growing list of other electronics giants, including Toshiba Corp. and Hitachi Ltd., in projecting two consecutive years of net losses, with their earnings hit by weak sales and a stronger yen.
Panasonic anticipates its operating profit, which better reflects the performance of its core businesses, to be in the black for the current business year through next March, the sources said.
But a solid recovery in sales of its mainstay products, including flat-panel TVs and digital cameras, is expected to take more time amid the ongoing global economic downturn.
Panasonic expects to book heavy restructuring costs as it cuts 15,000 jobs worldwide by the end of next March and shutters 27 of its production facilities in Japan and overseas.
Meanwhile, Sanyo Electric Co., which is being acquired by Panasonic, announced Thursday it expects an increase in annual operating profit, beating analyst estimates.
Operating profit, or sales minus the cost of goods sold and administrative expenses, will probably triple to \25 billion in the 12 months to March 31, 2010, from \8.28 billion a year earlier, Sanyo said.
[BUSINESS NEWS]
Friday, May 15, 2009
NEC, Hitachi exit project for computer
(Kyodo News) NEC Corp. and Hitachi Ltd. said Thursday they will not participate in the manufacturing phase of a government-led project to develop next-generation supercomputers so they can cut costs amid deteriorating business conditions.
NEC, which incurred a group net loss of \296.65 billion in business 2008, which ended in March, would shoulder over \10 billion in research and development costs if it continued to participate in the project.
Hitachi, another key member of the project facing tough times, followed suit later Thursday, announcing separately that it will exit the supercomputer project.
With the two electronics giants leaving the project, the government will likely face a fundamental review of the project to develop the world's fastest supercomputers, which are expected to run at a maximum speed of 10 petaflops, or 10 quadrillion floating point operations, per second.
The project, led since 2006 by the Education, Sports, Culture, Science and Technology Ministry, is now at the final stage of detailed system design.
The government has so far invested about \115 billion in the project, which is expected to be completed by 2012.
Fujitsu Ltd. is also part of the project to develop the supercomputers, which can be used in simulating experiments for developing new drugs, predicting the paths of typhoons or studying the formation of galaxies.
NEC has been one of the global leaders in the field and plans to continue development of cutting-edge supercomputers even after it withdraws from the project.
The company made the Earth Simulator supercomputer, which the Japan Agency for Marine Earth Science and Technology uses for global warming projections.
Fujitsu CPU is fastest
Fujitsu Ltd. has developed the world's fastest central processing unit, becoming the first Japanese company in 10 years to claim the top spot, company officials said Wednesday.
The new CPU, called Venus, runs 2 1/2 times faster than the product of its rival, Intel Corp., according to the officials. Fujitsu last held the record for the world's fastest CPU in 1999.
Fujitsu's new CPU, often called the computer's brain, may be installed in a next-generation supercomputer that is planned to begin operation at Riken, the officials said.
[BUSINESS NEWS]
Friday, May 15, 2009
IHI to head offshore for shipbuilding components
(Bloomberg) IHI Corp. plans to increase imports of shipbuilding components to counter the yen's rise.
The heavy-machinery maker's IHI Marine United Inc. unit, which buys "most" of its components from domestic suppliers, plans to buy parts including pumps and motors from South Korea and other nations, Shigemi Kurahara, the subsidiary's incoming president, said, without specifying volumes and suppliers.
IHI forecast a 64 percent decline in shipbuilding operating profit this business year to \1 billion because of the stronger yen. The unit will review procurement to hedge currency risk and cut costs and will likely increase purchases from South Korea, where quality improvements in vessels and parts have boosted demand from global shipping lines, Kurahara, 60, said.
"We need a business structure that's less affected by factors beyond our own control," said Kurahara, who takes IHI Marine United's helm in June.
South Korean shipbuilders, now the world's largest, used to import Japan-made components, Kurahara said. The yards now make about 80 percent of the parts domestically, and IHI imports electrical cable from the country for its ships, he said.
"As far as our customers agree, we are putting overseas-made parts on ships we build," Kurahara said.
IHI assumes the yen will strengthen 7 percent to average \95 against the dollar for the year started April 1.
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