Japan's Sanyo Electric Co. Ltd. posted a U.S. $170-million quarterly loss due to sluggish demand for digital cameras and earthquake damage to a chip factory, but left its full-year outlook unchanged.
Sanyo is said to be one of the world's largest producers of digital cameras, but more than 90 percent of its output is supplied to Olympus Corp. and other makers, many of which have scaled back production plans due to tough competition and sluggish demand.
Mirroring the slowing demand, Sanyo said it has cut its digital camera output forecast to 11 million units for 2004/05 from its previous target of 14 million units. The target was cut from 18 million units in October 2004.
Sanyo said its group net loss totaled 17.6 billion yen (approx. $169.8 million) in the 3 months to Dec. 31, 2005, against a profit of 9.9 billion yen (approx. $95.7 million) recorded in the same quarter last year.
Quarterly sales fell 5 percent to 620.6 billion yen (approx. $6.0 billion).
Sanyo's earnings were also hit by October's earthquake in the Niigata region, about 250 km north of Tokyo, which forced it to suspend operations at chip-making subsidiary Niigata Sanyo Electronic Co. because of structural damage.
The company had estimated damage at Niigata Sanyo would come to 50.3 billion yen (approx. $486.4 million). It has also said the earthquake would cause a 51-billion yen (approx. $493.2-million) decline in sales and a 37-billion yen (approx. $357.8-million) fall in operating profit in its semiconductor business in 2004/05.
As a result, Sanyo in December warned of a net loss of 71 billion yen (approx. $686.6 million) -- its worst-ever loss -- for the year to March 31, 2004 against a year-earlier profit of 13.4 billion yen (approx. $129.8 million).
Sanyo at that time also lowered its full-year estimate for group operating profit by 38 percent to 60 billion yen (approx. $580.3 million) and cut its sales forecast to 2.53 trillion yen (approx. $24.5 billion). It recorded a 95.5-billion yen (approx. $923.6-million) profit and sales of 2.51 trillion yen (approx. $24.3 billion) in 2003/04. (Reuters)
to Daily News