Matsushita Revises Full Year Forecast on Strong Q3 Results; Divests Stake in Universal (MC)

Matsushita Electric Industrial (MC) reported 3rd quarter FY06 earnings after the Tokyo Stock Exchange closed. Matsushita's sales increased 4% y-o-y driven by strong overseas sales up 10%, with operating profit up 47% y-o-y, pre-tax income was up 52% leading to a 39% increase in net income y-o-y. EPS on a diluted basis was 22.29 yen ($0.19) against 15.56 yen ($0.15 per EPS data supplied by MSN Money) in the same period last fiscal year. Matsushita also released a statement announcing it will divest its 7.66% stake in Universal Studios Holding Corp. to Vivendi Universal (V).

In its earnings presentation summary Matsushita said it achieved record sales in Q3 on strong domestic and overseas results, despite a kerosene fan heater recall in Japan. It upward revised its full-year forecast for operating profit to 400 billion yen (approx. US$3.4b at arbitrary rate of Y118/US$1; see more revised forecast details below). And it said its balance sheet improved through reforms carried out since FY02, including inventories, net cash and unfunded portion of its employee pension.

Matsushita nearly doubled its sales of plasma screen TVs in the quarter y-o-y from 77.9 billion yen to 148.3 billion yen (US$1.26b at Y118/US$1). Since the start of the year Matsushita has announced aggressive plant investment plans to boost its production capacity of plasma screens as it competes for global market share.

Matsushita revised its full-year forecast (ending March) as follows compared to its original forecast last April:
    • Sales: +120 billion yen or +1.4%
       - Domestic Sales: Flat
       - Overseas Sales: +120 billion yen or +2.9%

    • Operating Profit: +70 billion yen or +21.2%

    • Pre-tax Income: +10 billion yen or +3.5%

    • Net Income: +20 billion yen or +18.2%

Review the following table of operating profit trends as explained by Matsushita in its 3rd quarter results presentation.

MC 1-yr chart: