Sanyo reports more quarterly losses

May 28, 2007
By Ken Worsley

Electronics maker Sanyo is one firm that has not benefited much from Japan’s booming economy. Today, the firm announced heavy quarterly losses yet again, although not as severe as last quarter.

Sanyo reported losses of 34.4 billion yen (or $283 million) in the quarter ending March 31, which is the eighth loss posted in the past ten quarters. According to Forbes, Sanyo has said, “Heavy restructuring efforts [are] now paying off and [Sanyo] forecasts a net profit for this fiscal year.”

Sanyo has been cutting costs on the production end by slashing jobs, with 16,200 workers getting pink slips over the past two years. According to Bloomberg, nearly 1,000 workers applied for Sanyo’s early retirement program in December, which cost the firm about 11 billion yen to settle.

Sanyo’s projection of a newt profit for this fiscal year may prove impossible unless some large assets are sold off. Naoki Fujiwara of Shinkin Asset Management remains skeptical:

I can’t see from this year’s forecast that the company will increase its efforts for the ongoing restructuring. The company’s operations doesn’t seem to be improving and I’m wondering what will change at this company.

Sanyo suffers from major image problems, with consumers generally viewing the firm and its products as ‘old’ and ’stale.’ In the long run, this is the essential problem that needs to be corrected. Cost-side improvements are certainly necessary, but what plans do they have for the revenue side?

Filed Under Business