PREVIEW-Japan electronics firms’ profit seen patchy

(For related table click [ID:nTOE69M00O]

* What: Quarterly results from Japan electronics makers

* When: Canon, Sharp, Oct. 27; Nintendo, Oct. 28

* Panasonic, Sony report on Oct. 29

* Patchy recovery clouded by forex, weak TV sales

By Isabel Reynolds

TOKYO, Oct 26 (BestGrowthStock) – Japan’s electronics firms are
expected to show a patchy recovery for July-September from last
year’s weak results but even strong performers will likely leave
their full-year forecasts unchanged as concerns mount over the
strong yen and disappointing demand for TVs.

A scorching summer boosted sales of air conditioners and the
Japanese government’s “eco-point” subsidy system helped domestic
demand for energy efficient household appliances, but the outlook
for the second half of the year to next March is murky.

“Some of the positive factors are temporary and overall I
think a lot of companies will leave their full-year forecasts
unchanged because of exchange rates,” said analyst Takao Hattori
of research firm T.I.W.

The dollar fell to a 15-year low against the yen (JPY=: ) on
Monday, approaching a postwar record low of 79.75 yen set in
1995, leaving many Japanese exporters’ dollar assumptions, at
around 90 yen, out of kilter with reality.

Electronics conglomerate Toshiba Corp (6502.T: ) has said it is
preparing for a yen rise to 70 to the dollar [ID:nTOE69O00F]
while a Japanese media report said Toyota Motor (7203.T: ) would
cut its assumed dollar rate to 80 yen [ID:nTKZ006604].

Electronics-to-entertainment giant Sony Corp (6758.T: ) (SME.N: )
is expected to climb back into the black with a 32.9 billion yen
profit for the quarter, analysts estimate, compared with a loss
of about the same size a year ago.

Despite the setback of the rising yen, solid demand for
Sony’s cameras, camcorders and games has been backed up by
continued cost-cutting, analysts say.

Shares in the company have risen more than 15 percent since
the end of the last quarter on June 30, compared with a 0.1
percent fall in the Nikkei average (.N225: ) over the same period.

TV DEMAND MURKY

Sony, which competes with global market leader Samsung
Electronics (005930.KS: ) and LG Electronics (066570.KS: ) in
televisions, will likely rein in losses in its TV business by
restructuring, including selling off factories. [ID:nTOE68607U]

That restructuring helped the company to surprise markets
with a 67 billion yen overall profit last quarter, when analysts
had expected a loss. Sony also raised its annual profit forecast
to 180 billion yen for the year.

“Their plan for TV sales was pretty aggressive, so they may
not meet it in terms of unit sales,” said Hattori of T.I.W.,
referring to Sony’s target of 25 million sets for the year.

“But the effects of restructuring may kick in,” he added. “I
think that will probably offer more support than expected in the
second quarter and going forward.”

He nevertheless expected Sony to make a loss in TVs over the
full year to next March, with recent comments from manufacturers
pointing to falling prices and weaker-than-expected demand for
televisions in the United States. [ID:nTOE69K05Y]

“Our view on the U.S. market is getting gloomier by the day,”
said DisplaySearch television market analyst Torii Hisakazu.

That trend may deliver a particularly heavy blow to panel
maker Sharp, which will likely suffer from a cut in production of
liquid-crystal display (LCD) panels this year and is expected to
see a 32 percent fall in second-quarter operating profit.

Rival panel-maker LG Display (034220.KS: ) of South Korea last
week reported its lowest profit in six quarters, as LCD panel
prices tumbled.

Among other tech-sector leaders, games giant Nintendo is
expected to report profits down by more than a third after it was
forced last month to cut its own sales and profit forecasts for
the year to next March, blaming the strong yen and a lack of
compelling software. [ID:nTOE68S029]

Canon Inc (7751.T: ), which kicks off the tech sector’s
earnings season on Wednesday, is expected to show a nearly 50
percent jump in operating profit year-on-year to 89.5 billion
yen, on healthy camera sales and cost-cutting.

Panasonic Corp (6752.T: ) (PC.N: ) is seen doubling profits to
97.6 billion yen on the previous quarter, with sales of air
conditioners and other household goods booming, and its outlook
is considered relatively rosy after sharpening its focus on
environmental technology.
(Additional reporting by Reiji Murai; Editing by Edmund Klamann)

PREVIEW-Japan electronics firms’ profit seen patchy