Matsushita's Plasma TV Sales Disappoint

Includes: GLW, MC-OLD, SHCAY
by: David Jackson

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

Matsushita's Profit Climbs 7%, Led by Sales of Plasma TV Sets

  • Summary: Japanese electronics company Matsushita, which sells products under the Panasonic brand in the US, reported a 42% year over year rise in operating profit in Q2 due to strong sales of plasma TVs and digital cameras. Net profit rose 7%. Matsushita holds 70% of the plasma market, and said that plasma sales rose 70%. The company said that price declines were less severe than for LCD TVs, and that lower prices were offset by sales of larger size TVs and lower manufacturing costs. Despite the 70% rise, Matsushita said that plasma sales were below its expectations for the quarter. Its digital camera sales rose to 43.8 billion yen from 22.1 billion yen due to the popularity in the US of its slim digital cameras with image stabilization.
  • Comment on related stocks/ETFs: Matsushita trades as an ADR in the US (MC-OLD). See Steven Towns's outstanding write-up of Matsushita's results, including links to the company's presentation and press release. Matsushita's concern about demand in the US and China is particularly interesting. Matsushita's disappointment at plasma sales in Q2 was effectively predicted by Simon Lewis on Seeking Alpha on July 24th. If plasma is losing out to LCD screens, Sharp (OTCPK:SHCAY), which just announced Q2 results, may be a better bet. Note that Matsushita's results contain a mixed message for Corning (NYSE:GLW) which supplies glass for plasma and LCD TVs. Matsushita's Q3 plasma sales were disappointing, but the move to larger sizes -- note that Matsushita recently launched a 103" model -- should be a positive for Corning. Corning just announced that it would miss Q3 estimates due to excess customer inventory. William Trent says the entire flat panel market has been over-hyped. Seeking Alpha, by the way, has outstanding coverage of the flat panel stocks.