Matsushita posts first loss in 33 years

By Staff and reports

TOKYO, Japan (CNN) -- Japan's biggest mobile phone maker, Matsushita Communication, posted its first quarterly loss in 33 years.

Weak domestic and global demand for handsets pushed losses for the April-June quarter to $48.2 million, in contrast to a profit of $123 million just one year ago.

The numbers were far worse than analysts had expected.

Matsushita takes the hit as it faces intensifying competition in Japan's handset market. Development costs are rising as more features are built into next-generation handsets.

Swing into the red

The electronics group also revised its April to September forecast, projecting losses of $148.8 million.

Nomura Securities analyst Tomohiko Miyazaki called the announcement a "negative surprise," the Nikkei Financial Daily reports.

On Wednesday, shares of Matsushita Communication closed up 1.6 percent in Tokyo ahead of the announcement.

But analysts say the company's stock is likely to move down Thursday as investors search for a bottom.

"You cannot say that the stock price reflects the negative developments on the earnings front," Miyazaki added.

"The possibility has emerged that the stock will fall under 3,000."

Matsushita Communication was down 480 yen or 10.88 percent to 3,940 yen by mid-morning Thursday, becoming the biggest percentage loser on the first section of the Tokyo Stock Exchange.