Sanyo warns of ¥70 billion loss

Sanyo unveiled its robotic guard dog last November. Story Tools

TOKYO, Japan (Reuters) -- Sanyo Electric Co, Japan's third-largest consumer electronics maker, has slashed its earnings outlook for the business year to March 31 to a consolidated net loss of 70 billion yen ($590 million).

Sanyo released details of the revision at a news conference Friday afternoon given by the company's president, Yukinori Kuwano, in Osaka.

The company said its new forecast was for sales of 2.16 trillion yen, an operating profit of 78 billion yen and a consolidated net loss of 70 billion yen.

Earlier on Friday, the Nihon Keizai Shimbun business daily said Sanyo would post a loss this business year due to heavy losses on stockholdings and restructuring costs in its struggling home appliance division.

The company had projected an eight billion yen (about $67 million) net profit in its latest forecast issued in October, compared with a modest 1.73 billion yen profit a year earlier when Japan's electronics companies were hit by the IT slump.

Sanyo Electric, the world's largest maker of mobile phone batteries, has seen brisk growth this year in sales of camera-equipped phones and digital cameras, bolstering its bottom line despite a dull global economy.

The company lifted its full-year revenue target to 2.16 trillion yen and operating profit of 78 billion yen, compared with last October, when Sanyo forecast full-year revenues of 2.10 trillion yen and an operating profit of 70 billion yen.

China competition

But the company's home appliance unit has faced a prolonged shake-out as it grapples with stiff competition from low-cost competitors in China.

Like most big Japanese companies, and especially banks, Sanyo has also been hit hard by a slide in Tokyo share prices in recent months, eroding the value of shareholdings that in many cases are maintained to cement business ties.

The Nihon Keizai said Sanyo would book about 70 billion yen in appraisal losses on its stockholdings this business year and face another 23 billion yen in restructuring charges.

Sanyo's shares closed 0.32 percent higher at 309 yen, below the broader market's gain of 1.7 percent as measured by the Nikkei 225.

Story Tools		Click Here to try 4 Free Trial Issues of Time!

Nikkei rebounds to above 10,000 • Japan talks trade at ASEAN summit • Japan-Thailand move on trade talks • China, U.S. lead oil demand boom

EU 'crisis' after summit failure • Iran poll to go to run-off • 40 million credit cards exposed • U.S. House votes to keep U.N. dues