Matsushita Electric Industrial Co reported Thursday that profits in the first fiscal half plummeted 83% year-over-year to 9.51bn yen ($81.5m) , while operating profit fell 39% to 105.6bn yen ($904.9m). Overall sales were flat with last year at 3.89 trillion yen ($33.33bn). Adding to the bad news, the electronics giant said that it now expects things to be worse during the second half, predicting that net profit will fall 49% to 48bn yen – and less than half of what it had initially expected. An earlier projection had been for profits of 128bn yen. The company blames the poor showing on the Asian economic crisis, which has led to weakening demand for the company’s products domestically and throughout the region, resulting in severely increased pricing pressure. Monitors, CD-ROM drives and semiconductors were all cited as areas where demand was particularly soft. The company estimates that the price-cutting alone cut profits by 195bn yen in the first six months of the fiscal year. Cost- cutting moves and the depreciation of the yen – which has helped sales in Europe and North America – simply weren’t enough to offset the trouble in its own back yard.
