*NEWS*SANYO’S NET LOSS OF $1.5BILLION

[Anonymous]

Sanyo
cut outlook as digital boom slows

TOKYO, March 05 – Japan’s major electronics
makers, Sanyo Electric Co. Ltd. , on Wednesday cut their
earnings outlook for this business year, underscoring a slide in prices and
sales of digital goods.

In its
third downward revision to full-year estimates, Sanyo, Japan’s third-largest
consumer electronics maker, said it was likely to fall deeper in the red in the
year ending on March 31 due to falling prices of digital cameras and mobile
phones.

Sanyo, one of the world’s
largest producers of digital cameras, has suffered from slower-than-expected
growth in the digital camera market.

Over 90 percent of Sanyo’s output is supplied to Olympus
Corp  and other makers, many of which have scaled back production plans due to
tough competition and sluggish demand.

Sanyo now
expects its net loss to come to 121 billion yen ($1.15 billion) for the year to
March 31, compared to the previous estimate of a 71 billion yen loss.

The
Osaka-based company had given the 71 billion yen figure — its worst-ever loss
— in December after a major earthquake in the Niigata region north of Tokyo
caused severe damage at one of its chip factories.

Sanyo
also slashed its operating profit forecast to 43 billion yen from 60 billion
yen. That figure had also been lowered in December, from 97 billion yen.

Analysts
on average had expected a net loss of 74.5 billion yen and operating profit of
55 billion yen, according to forecasts compiled by Reuters Estimates.

In light
of the record net loss, Sanyo plans to cancel its year-end dividend, in sharp
contrast to a growing pool of electronics conglomerates including Hitachi Ltd.
and Toshiba Corp.  that plan higher dividend payouts.

Sanyo
paid three yen per share for the first half, and had planned a three yen
year-end payout.

In an
effort to boost the profitability of its semiconductor operations, Sanyo said it
planned to integrate two of its chip subsidiaries including the quake-hit unit
in Niigata and part of Sanyo’s own microchip operations into a new chip
production unit.

[Author]

March 29, 2005 at 10:38 AM