Matsushita Reports Third-Quarter and Nine-Month Results; Sales and Operating Profit Continue to Rise

Business Wire, Feb 20, 2001

Business Editors

OSAKA, Japan--(BUSINESS WIRE)--Feb. 20, 2001

Matsushita Electric Industrial Co., Ltd. (NYSE: MC) today reported its consolidated financial results for the fiscal third quarter and nine months, ended December 31, 2000.

Third-Quarter Results

Consolidated Group sales for the third quarter increased 7% to 1,992.6 billion yen (U.S $17.33 billion), from 1,866.7 billion yen in the same period a year ago. This increase was due to growth in all three sectors, led by Components.

During the third quarter, the Japanese economy maintained a moderate recovery, sustained by capital investment in the private sector. However, future growth remains uncertain due to sluggish consumer spending and reduced exports. Overseas, an economic slowdown in the U.S. has spilled over into the Asian economies, while Europe also seems to be experiencing setbacks.

Third-quarter domestic sales were 1,054.8 billion yen ($9.17 billion), up 11% from 952.6 billion yen in the same quarter of the previous year. Double-digit sales growth in Industrial equipment and Components, as well as an upturn in Consumer products sales fueled domestic growth.

Overseas sales increased 3% to 937.8 billion yen ($8.16 billion), compared with 914.1 billion yen in the same quarter a year ago. The increase in overseas sales is mainly attributable to strong Component sales and growth in the Asian and Chinese markets.

Consolidated operating profit for the third quarter increased 9% to 59.4 billion yen ($516 million), from 54.4 billion yen in the same quarter a year ago. Although price competition continued to negatively affect results, manufacturing cost reductions and sales gains, particularly in Components, contributed to the third quarter increase in operating profit. Income before income taxes decreased 54% to 45.6 billion yen ($397 million), from 99.5 billion yen and net income decreased 62% to 22.8 billion yen ($198 million), from 60.7 billion yen in the same quarter a year earlier. These decreases are largely due to a non-operating loss incurred in this quarter related to one-time compensation benefits for employees affected by Matsushita's new regional-based employee remuneration system, and a one-time non-operating gain on the sale of EPCOS AG shares realized in the prior year's third quarter.

Consolidated net income per common share for the quarter was 10.53 yen (9 cents per American Depositary Share (ADS), each representing one share of common stock), compared with 27.95 yen in the quarter a year ago, both on a diluted basis.

Nine-Month Results

Consolidated Group sales for the nine months ended December 31, 2000 increased 5% to 5,729.7 billion yen ($49.82 billion), from 5,459.4 billion yen in the same period a year ago. Operating profit for the nine-month period increased 33% to 159.0 billion yen ($1.38 billion), from 119.5 billion yen in the same period last year. Income before income taxes decreased 18% to 150.7 billion yen ($1.31 billion), from 183.8 billion yen a year ago. Net income also decreased 22% to 74.2 billion yen ($645 million), from 94.7 billion yen during the same nine-month period last year.

Consolidated net income per common share for the nine months was 34.22 yen (30 cents per ADS), compared with 43.90 yen a year ago, both on a diluted basis.

Third-Quarter Sales Breakdown by Product Category

The Company's third quarter consolidated sales by major product category are summarized as follows:

Consumer Products

Sales of Consumer products increased 4% to 869.7 billion yen ($7.56 billion), compared with 835.8 billion yen in the same quarter a year ago. Domestic sales of Consumer products increased 5% and overseas sales rose 3%. Within this category, sales of video and audio equipment increased 6% to 514.8 billion yen ($4.48 billion). Domestic sales of video and audio equipment grew strongly due to rising sales of digital TVs, DVD players, and CD music albums. Overseas sales, also benefiting from strong TV and DVD player sales, were up over the same quarter last year.

Sales of home appliances and household equipment increased 1% to 354.9 billion yen ($3.09 billion). Although domestic sales were slightly down, the industry-first centrifugal force washer-dryer and induction-heating cooking equipment recorded positive results. Overseas sales in this category grew steadily.

Industrial Products

Sales of Industrial products increased 8% to 695.2 billion yen ($6.05 billion), from 643.4 billion yen in the same period a year ago. Domestic sales continued to record double-digit growth, increasing 19%. However, overseas sales in this category were down 3%. Sales of information and communications equipment grew 5% to 502.6 billion yen ($4.37 billion). Domestic sales of information and communications equipment increased significantly due to strong growth in mobile communications equipment such as cellular phones, CD-R/RW drives, and business-use AV equipment.

Sales of Industrial equipment increased 17% to 192.6 billion yen ($1.68 billion). Domestic sales surged with overseas sales also growing strongly, as sales of factory automation and car AV equipment continued to rise both in Japan and overseas.