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Panasonic Hit Q1 Profit After Bloodbath

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Panasonic’s results for the first quarter of FY 2013 to the end of June show profit before tax also rose dramatically to 38.7bn yen – from a loss of 17.4bn yen in the Jan-Mar quarter.

This is in spite of Pana’s group sales for Q1 actually declining 6% to 1.8bn yen, blamed on “weak demand” for AV products in its native Japan, as domestic sales there took a tumble and flat panel TV demand in Japan was also “very difficult,” it said in a statement.

The Viera maker says it expects to sell 15.5 million TV sets in FY 2013 – a drop of 2 million units.

However the Japanese market showed signs of a slow recovery after the Great East Earthquake, although the financial crisis in Europe didnt help matters either, with both Euro and US markets remaining a concern, CFO Hideaki Kawai told media at a conference call today.

Panasonic’s operating profit enjoyed a massive turnaround increase to 38.6bn yen up 5.6bn a year ago.

The healthy results were mainly due to fixed cost reduction, streamlining material costs and the giant also stopped selling TVs at a loss.

Pana said it has been working on a new profit making business model which consolidated its business units – which extend from automobiles to technology and eco solutions – under a new structure that enables a more direct relationship with customers globally.

Last year Pana also joined forces with fellow Japanese techies Sony, Toshiba and Hitachi, known as ‘New Co’ to make displays for tablets and smartphones in a bid to further streamline innnovation costs, and announced plans to lay off thousands.

Sales of Panasonic AVC division, which includes LCDs, Blu Ray players and AV equipment, decreased 20% to 359.7 bn yen, although the Japanese giant did note sales of PCs increased.

Appliance sales were also up 3% to 431.4 bn yen and the company said it enjoyed a good run on fridges and washing machines and pushed hard on the sector launching several new fridge models in Australia recently.

However, it made a loss on its Systems and Communication division which includes printers and PBX equipment as sales dropped 9% to 164.5bn yen.

Pana says its forecast for FY 2013 is unchanged from that announced in May.

However, despite the upturn, analysts seem to think there a long road ahead before it reverts back to glory days and need to do more to maintain momentum for the rest of the financial year.