Matsushita Electric Industrial Co Ltd reported a 41.5 percent jump in its quarterly profit on Wednesday, boosted by strong demand for its plasma TVs, and raised its half-year forecast by 11 percent.
Matsushita is the world's largest supplier in the global plasma TV market, which analysts expect to grow 39 percent to $21 billion this year, and competes with South Korea's Samsung Electronics Co Ltd and LG Electronics Inc.
Brisk sales of digital cameras and a recovery of its mobile phone business also helped to lift its profits. The Panasonic-brand maker reported an operating profit of 65.12 billion yen ($556.2 million) for April-June. That is the highest first-quarter profit for Matsushita in nine years and compares with 46.02 billion profit a year earlier.
Sales rose 4.3 percent to 2.14 trillion yen. Matsushita's announcement comes one day after strong results from Sharp Corp, another vertically integrated flat TV maker in Japan. Sales of Matsushita's plasma and liquid crystal display (LCD) TVs shot up 60 percent from a year earlier to 182.6 billion yen in the three months, and digital camera sales doubled to 43.8 billion yen.
The Osaka-based company last week launched its first digital single lens reflex camera, a high-end model that uses interchangeable lenses, aiming to take on Canon Inc and Nikon Corp.
But the quarterly profit missed a consensus forecast of 78.7 billion yen from five brokerages polled by Reuters Estimates. "I was looking for an operating profit of 75 billion yen, so it came in below expectations. But we can still say this is a strong set of numbers," said Daiwa Research Institute analyst Kazuharu Miura.
Although price declines for flat TVs picked up pace in the current quarter, Matsushita is well positioned to offset falling prices with volume growth as it has just raised its plasma panel output capacity by 50 percent.
It aims to double its plasma-TV sales to 4 million units this business year. Despite intensifying competition and increases in prices of crude oil and raw materials, Matsushita lifted its first-half operating profit forecast to 190 billion yen from 171 billion due to favourable sales of its digital products, including flat-panel TVs and digital cameras.
But for the full year to next March, Matsushita maintained a forecast made in April for an operating profit of 450 billion yen. That is below a consensus forecast of 488.6 billion yen from 17 brokerages polled by Reuters Estimates. "After this (first-half) revision, the chance is now much higher that it will be able to hit the (full-year) consensus," Miura said. Matsushita said the World Cup soccer tournament helped to boost its sales by about 20 billion yen, although the impact was less than expected.
"We are not that optimistic about the second half ... We don't think the business environment in the first quarter will stay as it is throughout the year," Matsushita Executive Vice President Tetsuya Kawakami told a news conference. "Prices will be changing, so will foreign exchange rates and the market condition."
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