Matsushita surrenders crown in record loss


Sony and its popular Vaio computer line have crept up on the former world electronics No. 1, Matsushita

By Alex Frew McMillan
CNN Hong Kong

TOKYO, Japan (CNN) -- Matsushita Electric Industrial Co. confirmed what industry analysts already suspected: it is no longer the world's largest electronics maker.

Matsushita also posted a record loss for the year just ended in March. It fell into the red to the tune of 431 billion yen ($3.35 billion).

Its electronics crown, however, stems from total worldwide sales. Matsushita's corporate name may not be that well known outside Asia but its brands are, including Panasonic, JVC and Technics.

Sony has snatched the title of world No. 1. The consumer electronics maker on Thursday posted total sales of 7.6 trillion yen ($58.9 billion) (Sony earnings).

Total sales at $54 billion

Matsushita on Friday said total sales fell 10.5 percent to 6.88 trillion yen ($53.5 billion)

Based on company forecasts and analysts' models, the passing of Matsushita's long-held crown had been anticipated for some months.

Sony's strong numbers, coupled with slow reform at Japanese competitors like Toshiba and Matsushita, mean Sony's stiffest challenge now comes from South Korean competitors like Samsung Electronics, analysts say (full story).

That Seoul-based memory-chip maker, due itself to surrender its world memory chip crown to Micron Technology, has a rapidly expanding line of consumer-oriented products.

Matsushita cited the sluggish economy at home and around the world in reporting its results.

"Matsushita cited negative effects of the recession in the global IT industry and weak economic conditions in Japan and overseas," the company wrote in a release.

"The recession in Japan deepened, with the sluggish consumer spending and retracted capital investment, while overseas the slowdown in U.S. economic growth, combined with the September 11 terrorist attacks, led to a weakening of Asian and European economies."

The previous year, Matsushita netted a profit of 41.50 billion yen. Matsushita, like most Japanese blue chips now reporting results, envisions better times ahead.

Similar profit this year

It forecast a net profit of 42.0 billion yen for the business year that runs through to March 2003.

But Matsushita will struggle to regain its crown. It forecasts total sales of 7.08 trillion yen, no match even for Sony's tally of this year.

Its loss came after the end of trade and matched the company's own forecasts. Matsushita stock closed up 1.87 percent Friday, at 1739 yen.

To continue its corporate reform process, the company also said it will merge two subsidiaries as of the start of 2003.

Kyushu Matsushita Electric Co. and Matsushita Graphic Communications Systems Inc. will combine on January 1.