Sanyo turns profit in 06/07, expects decline

Tokyo, May 28: Japan's Sanyo Electric Co. Ltd. reported a swing to an annual operating profit after cost cuts more than offset sluggish digital camera sales, but it forecast an unexpected earnings decline for this year.

Sanyo, the world's largest rechargeable battery maker, enjoyed strong solar cell demand, but its digital camera operations were hit by fierce price competition with larger rivals such as Sony Corp.

Sanyo's earnings have been hit hard in recent years by the cost of restructuring steps such as job cuts and plant closures, as well as by earthquake damage to its microchip factory, forcing it to issue Tokyo, May 28: Japan's Sanyo Electric Co. Ltd. reported a swing to an annual operating profit after cost cuts more than offset sluggish digital camera sales, but it forecast an unexpected earnings decline for this year.

Sanyo, the world's largest rechargeable battery maker, enjoyed strong solar cell demand, but its digital camera operations were hit by fierce price competition with larger rivals such as Sony Corp.

Sanyo's earnings have been hit hard in recent years by the cost of restructuring steps such as job cuts and plant closures, as well as by earthquake damage to its microchip factory, forcing it to issue $2.5 billion worth of preferred shares to Goldman Sachs and two other financial institutions last year.

The Osaka-based company on Monday forecast an operating profit of 45 billion yen ($369.9 million) for the year to March 2008, down 9.2 percent on the year and falling short of a consensus of 51 billion yen in a poll of 10 analysts by Reuters Estimates.

In the latest management reshuffle at the struggling consumer electronics maker, Toshimasa Iue, the grandson of the company's founder, stepped down as president last month, citing a lack of trust from financial institutions and investors.

Iue was replaced by Seiichiro Sano, who was in charge of Sanyo's general affairs and human resources.

In the year ended March 31, operating profit totalled 49.57 billion yen, compared with a 17.15 billion yen loss a year earlier.

Sanyo's net loss came to 45.36 billion yen, compared with a 205.66 billion yen loss a year earlier, while sales slid 7.6 percent to 2.215 trillion yen.

Prior to the announcement, shares in Sanyo closed up 3.2 percent 193 yen, outperforming the Tokyo stock market's electrical machinery index IELEC, which rose 0.7 percent.

Sanyo shares have lost more than one-third of their value during the previous business year, while the sub-index gained 0.5 percent.

Reuters.5 billion worth of preferred shares to Goldman Sachs and two other financial institutions last year.

The Osaka-based company on Monday forecast an operating profit of 45 billion yen (9.9 million) for the year to March 2008, down 9.2 percent on the year and falling short of a consensus of 51 billion yen in a poll of 10 analysts by Reuters Estimates.

In the latest management reshuffle at the struggling consumer electronics maker, Toshimasa Iue, the grandson of the company's founder, stepped down as president last month, citing a lack of trust from financial institutions and investors.

Iue was replaced by Seiichiro Sano, who was in charge of Sanyo's general affairs and human resources.

In the year ended March 31, operating profit totalled 49.57 billion yen, compared with a 17.15 billion yen loss a year earlier.

Sanyo's net loss came to 45.36 billion yen, compared with a 205.66 billion yen loss a year earlier, while sales slid 7.6 percent to 2.215 trillion yen.

Prior to the announcement, shares in Sanyo closed up 3.2 percent 193 yen, outperforming the Tokyo stock market's electrical machinery index IELEC, which rose 0.7 percent.

Sanyo shares have lost more than one-third of their value during the previous business year, while the sub-index gained 0.5 percent.

Reuters>