Osaka - Saturday, February 4, 2012
Nikkei, Japan’s leading newspaper specialized in business and economy, reported today that announcement of financial performance of Japanese listed companies April – December 2011 (consolidated base) is worse than the original estimation, and that the profit for fiscal year ending March 2012 is to drop by 21% from the previous year.
This mostly attributes to high yen, flood in Thailand and the EU financial crisis, which are all negative factors for export-oriented industries.
Having said that, companies driven by domestic demand such as telecommunications and consumer goods are strong. Trading companies have recorded the highest profit in the history attributing to strong business in natural resources and energy.
It seems that there is a shift in the industries/companies that drives Japanese economies.
1. How did Nikkei come to the conclusion?
Nikkei collected and analyzed financial data of 743 listed companies (excluding financial and new companies) that have made announcements of financial performance for April – December 2011 by February 3.
2. What was the conclusion?
It is estimated that the decrease in profit for manufacturing companies from the previous year tops to as much as 36%, when the original estimation was 10%. However, for non-manufacturing companies it would increase by 2%.
1) Who are the losers?
They are consumer electronics companies that heavily rely on flat panel TV in particular, such as Panasonic, Sony and Sharp. The total losses of the three companies are to reach as much as 965 billion yen.
Panasonic alone announced that they will be in the negative by as much as 780 billion yen for the fiscal year ending in March 2012 when it was in the positive by 74 billion yen for the fiscal year ending in March 2011. The loss is the greatest in the history for Japanese manufacturing companies. Although the estimation includes approximately 760 billion yen of structural reform cost such as impairment loss attributing to revenue deterioration from acquiring Sanyo, it is clear that the company was hard hit by the external negative environmental factors and that they need to change their strategy.
2) Who are the winners?
They are non-manufacturing companies that mostly rely on domestic demand and resource business.
For example, KDDI, a leading telecommunications company, is estimated to record the greatest profit in the history attributing to strong business in smart phones. Also trading companies whose resource related businesses are strong are increasing their profit to record the highest in the history.
3) What are the implications?
The Japanese companies used to be led by export-oriented manufacturing companies of automobiles and electronics but the recent estimation of the financial result indicates that the industries/companies that drive the Japanese economy are shifting from such companies to non-manufacturing companies that are driven by domestic demand.
3. What are the reasons for ill performance of manufacturing companies?
They are mainly external environmental factors.
1) Highest yen in the history
With the unbelievable high yen, it is quite possible that the total decrease of profit for all listed companies is to reach as much as 1 billion yen for the fiscal year ending March 2012. Automobiles and electronics are the mostly hard hit companies.
2) Flood in Thailand
Many export-oriented companies are hard hit by the flood of Thailand because many of them have key factories in Thailand. For example, the negative impact of the flood is estimated to be more than 100 billion yen for Honda and Toyota respectively.
3) EU financial crisis
Negative impact of the EU financial crisis cannot be ignored, either. For example, the printer business of Ricoh is staggering because companies operating in EU are cutting down on costs due to depression. For this reason, Ricoh is to fall to red for the first time in history.
Resources:-
The recent analysis of the financial performance of Japanese listed companies implies that the industries/companies that drives Japanese economy is shifting from export-oriented manufacturing companies such as automobile and electronics to non-manufacturing companies that rely mostly on domestic demand and resource business. The reasons of ill-performance of manufacturing companies are mostly of external environmental factors including historic high yen, flood in Thailand and EU financial crisis. For electronics companies that heavily rely on flat TV business, their strategy is also a possible factor.
2012年2月4日土曜日
2011年7月31日日曜日
Japanese Electronics Business and Performance – Why Strong and Weak?
Osaka - Sunday, July 31, 2011
Nikkei, Japan’s leading newspaper specialized in business and economy, reported on July 30 that announcement of financial performance of 8 major Japanese electronics for April – June 2011 (consolidated base) was complete and that there were large contrasts among them.
It is true that the Japan disaster that occurred on March 11 have negatively impacted them all attributing to shortage of components; however, it is apparent that some companies performed far better than others. This attributes to the differences in recovery and strength of business sectors. Some have started to recover and some others have been rather strong when some others have been weak.
1. How was the financial performance of the eight major Japanese electronics?
It is summarized in the chart below.
For Fiscal Year 2011, Consolidated
Company name / Sales (amount) / Sales (change from previous year) / Profit (amount) / Profit (change from previous year)
Hitachi* April-June / 2,150.6 / 0% / 2.9 / -97%
Hitachi* April-March / 9,500.0 / 2% / 200.0 / -16%
Panasonic* April-June / 1,929.5 / -11% / -30.3 /Fell to negative
Panasonic* April-March / 8,700.0 / 0% / 30.0 /-59%
Sony* April-June / 1,494.9 / -10% / -15.5 / Fell to negative
Sony* April-March / 7,200.0 / 0% / 60.0 /Returned to positive
Toshiba* April-June / 1,326.1 / -9% / 0.4 / 1%
Toshiba* April-March / 7,000.0 / 9% / 140.0 / 2%
Fujitsu April-June / 986.0 / -6% / -20.4 / Fell to negative
Fujitsu April-March / 4,600.0 / 2% / 60.0 / 9%
Mitsubishi Electric* April-June / 813.6 / 4% / 27.1 / 4%
Mitsubishi Electric* April-March / 3,790.0 / 4% / 135.0 / 8%
NEC April-June / 669.1 / 0% / -29.7 / Remained in negative
NEC April-March / 3,300.0 / 6% / 15.0 / Returned to positive
Sharp April-June / 640.3 / -14% / -49.2 / Fell to negative
Sharp April-March / 3,050.0 / 1% / 6.0 / -69%
* GAAP: Generally Accepted Accounting Principles
2. Which sectors started to smoothly recover from the disaster?
It is automobile related business sectors, which have started to recover above the original outlook.
Mainly for this reason, Hitachi made upward revision in their estimation of net profit for April – September from zero to 10 billion yen. The company also revised upward of their operation income estimation from 80 billion yen to 100 billion yen and expects 76 billion yen operation income in black. The growth in their construction machinery business in Asia and other emerging countries also is the reason for their upward adjustment. As a result, although high yen is a negative factor, the company did not revise downward their estimation for the fiscal year 2011 ending March 2012.
For the very similar reason, Mitsubishi Electric made upward revision their estimation of net profit for April – September from 45 billion yen to 55 billion yen. The order they received in June for automobile related business recovered to the same level as a year ago, and their factory automation related business in Asia remains strong. As a result, the company revised upward their estimation of the net profit for the fiscal year 2011 ending March 2012 from 135 billion yen from 10 billion yen.
3. Which sector in consumer electronics was strong?
It is home appliance. This is because after the disaster the general public became extremely aware of the eco (ecology and economy, i.e. energy saving) due to nationwide electricity shortage. This led to strong revenue in many home appliance businesses of energy saving products, in particular air conditioners, resulting in stronger performance of Mitsubishi Electric, Toshiba and Hitachi compared to other 5 companies.
Home appliances, although their price is stable compared to digital AV products, have been regarded as not as strong as digital AV because replacement cycle is long. However, home appliances profitability improved because each company launched value-added products of energy saving, antibacterial system/coating and so forth. Home appliance sales were strong in emerging countries where their life standard has been uplifting.
Mitsubishi Electric benefited from such strong home appliance businesses in addition to the recovery of automobile related businesses and strong social infrastructure businesses in Asia. Their worldwide sales of air conditioners and other energy saving home appliances such as refrigerators were strong. This contributed to 4% increase in the operating income for April – June from a year ago for their consumer electronics business.
For the very similar reason, Toshiba’s operating profit for April – June came back to black (positive) after 9 years.
4. Which sector in consumer electronics was weak?
It is digital AV. Flat panel TV demand has been sluggish especially in Europe. Prices have dropped dramatically in most products due to severe competition. As a result, revenue and profitability deteriorated yet there is no sign of improvement for the time being.
For this reason, Panasonic, Sony and Sharp, the three companies with large portion of their business in digital AV products fell in red (negative) for April – June.
Resources:-
The recent contrasts of financial performance announcement of 8 major Japanese electronics companies attributes to which business sectors each of them focuses in. Automobile related sector recovery is above original expectation when others are not, Asia social infrastructure businesses have been strong, home appliances businesses were strong but digital AV businesses were weak.
Nikkei, Japan’s leading newspaper specialized in business and economy, reported on July 30 that announcement of financial performance of 8 major Japanese electronics for April – June 2011 (consolidated base) was complete and that there were large contrasts among them.
It is true that the Japan disaster that occurred on March 11 have negatively impacted them all attributing to shortage of components; however, it is apparent that some companies performed far better than others. This attributes to the differences in recovery and strength of business sectors. Some have started to recover and some others have been rather strong when some others have been weak.
1. How was the financial performance of the eight major Japanese electronics?
It is summarized in the chart below.
For Fiscal Year 2011, Consolidated
Company name / Sales (amount) / Sales (change from previous year) / Profit (amount) / Profit (change from previous year)
Hitachi* April-June / 2,150.6 / 0% / 2.9 / -97%
Hitachi* April-March / 9,500.0 / 2% / 200.0 / -16%
Panasonic* April-June / 1,929.5 / -11% / -30.3 /Fell to negative
Panasonic* April-March / 8,700.0 / 0% / 30.0 /-59%
Sony* April-June / 1,494.9 / -10% / -15.5 / Fell to negative
Sony* April-March / 7,200.0 / 0% / 60.0 /Returned to positive
Toshiba* April-June / 1,326.1 / -9% / 0.4 / 1%
Toshiba* April-March / 7,000.0 / 9% / 140.0 / 2%
Fujitsu April-June / 986.0 / -6% / -20.4 / Fell to negative
Fujitsu April-March / 4,600.0 / 2% / 60.0 / 9%
Mitsubishi Electric* April-June / 813.6 / 4% / 27.1 / 4%
Mitsubishi Electric* April-March / 3,790.0 / 4% / 135.0 / 8%
NEC April-June / 669.1 / 0% / -29.7 / Remained in negative
NEC April-March / 3,300.0 / 6% / 15.0 / Returned to positive
Sharp April-June / 640.3 / -14% / -49.2 / Fell to negative
Sharp April-March / 3,050.0 / 1% / 6.0 / -69%
* GAAP: Generally Accepted Accounting Principles
Source: Nikkei, translated by the author
2. Which sectors started to smoothly recover from the disaster?
It is automobile related business sectors, which have started to recover above the original outlook.
Mainly for this reason, Hitachi made upward revision in their estimation of net profit for April – September from zero to 10 billion yen. The company also revised upward of their operation income estimation from 80 billion yen to 100 billion yen and expects 76 billion yen operation income in black. The growth in their construction machinery business in Asia and other emerging countries also is the reason for their upward adjustment. As a result, although high yen is a negative factor, the company did not revise downward their estimation for the fiscal year 2011 ending March 2012.
For the very similar reason, Mitsubishi Electric made upward revision their estimation of net profit for April – September from 45 billion yen to 55 billion yen. The order they received in June for automobile related business recovered to the same level as a year ago, and their factory automation related business in Asia remains strong. As a result, the company revised upward their estimation of the net profit for the fiscal year 2011 ending March 2012 from 135 billion yen from 10 billion yen.
3. Which sector in consumer electronics was strong?
It is home appliance. This is because after the disaster the general public became extremely aware of the eco (ecology and economy, i.e. energy saving) due to nationwide electricity shortage. This led to strong revenue in many home appliance businesses of energy saving products, in particular air conditioners, resulting in stronger performance of Mitsubishi Electric, Toshiba and Hitachi compared to other 5 companies.
Home appliances, although their price is stable compared to digital AV products, have been regarded as not as strong as digital AV because replacement cycle is long. However, home appliances profitability improved because each company launched value-added products of energy saving, antibacterial system/coating and so forth. Home appliance sales were strong in emerging countries where their life standard has been uplifting.
Mitsubishi Electric benefited from such strong home appliance businesses in addition to the recovery of automobile related businesses and strong social infrastructure businesses in Asia. Their worldwide sales of air conditioners and other energy saving home appliances such as refrigerators were strong. This contributed to 4% increase in the operating income for April – June from a year ago for their consumer electronics business.
For the very similar reason, Toshiba’s operating profit for April – June came back to black (positive) after 9 years.
4. Which sector in consumer electronics was weak?
It is digital AV. Flat panel TV demand has been sluggish especially in Europe. Prices have dropped dramatically in most products due to severe competition. As a result, revenue and profitability deteriorated yet there is no sign of improvement for the time being.
For this reason, Panasonic, Sony and Sharp, the three companies with large portion of their business in digital AV products fell in red (negative) for April – June.
Resources:-
The recent contrasts of financial performance announcement of 8 major Japanese electronics companies attributes to which business sectors each of them focuses in. Automobile related sector recovery is above original expectation when others are not, Asia social infrastructure businesses have been strong, home appliances businesses were strong but digital AV businesses were weak.
2009年10月10日土曜日
Digital Convergence to Shape the Ubiquitous Networking Society – From CEATEC Japan 2009
October 10, 2009 – Osaka, Japan,
CEATEC Japan, cutting-edge IT & electronics comprehensive exhibition was held in October 6-10, under the theme “Digital Convergence – Defining the Shape of the Future”. For many IT and electronics companies (perhaps especially Japanese companies), CEATEC is a good opportunity to introduce their cutting-edge technologies and concepts to the media and the general public, and this exhibition draws much attention worldwide. CEATEC Japan 2009 official website has been posting news updates, and there have already been many articles on CNET etc. There was also an evening TV news in Japan on 5th (i.e. before the opening) introducing some of the highlights.
Some highlights include future of mobile phones, new concept TV in which operation can be done without a remote control, future robots that can sing and dance or ride a bicycle, future EV car, and future nursing care products including a bed that can become a wheelchair which can be operated automatically by IT and transport system that is more user-friendly than current wheelchairs. It is amazing to see these includes products and companies not only from the traditional IT and electronics companies but also from automobiles (e.g. Nissan). The bed is of Panasonic group that has always been a major player in this exhibition. As far as the author understands, Panasonic used to introduce nursing care products in exhibition specialized in Home Care and Rehabilitation Exhibition only and not at CEATEC.
What is worth noting is that not only IT and electronics business but also automobile and healthcare business that were out of scope of this exhibition in the past also started to converge, creating new concept products, services and business, which implies the ongoing dramatic transformation of respective industries, shaping new competitive landscape in the new ubiquitous networking society. This can be explained by IT marketing principle and theory. As digitalization gets underway, convergence of products and services gets underway leading to lowering of barriers between business domain and industry. Probably the example easiest to understand for everyone is the convergence of digital camera, mobile phone and mobile application connecting to Internet.
Digital convergence has already been creating new market and business involving players from many industries such as online book, music and news, and is opening the door to the new virtualized world like the one depicted in a recent forbes.com article. The author strongly feels that digital convergence has potential to make our lives more convenient and productive in various settings including home, business, education and healthcare/nursing, opening the door to a new world. Whatever the new world may be, the author is very much fascinated by it and is looking forward to it.
References:-
CEATEC Japan 2009 Official Website (English Version)
http://www.ceatec.com/2009/en/news/index.html
Ceatec--gadget extravaganza in Japan
http://news.cnet.com/8301-1001_3-10367757-92.html?part=rss&subj=news&tag=2547-1_3-0-20
Our Virtualized World
http://www.forbes.com/2009/10/06/software-computers-enterprise-technology-virtualization-09_land.html
CEATEC Japan, cutting-edge IT & electronics comprehensive exhibition was held in October 6-10, under the theme “Digital Convergence – Defining the Shape of the Future”. For many IT and electronics companies (perhaps especially Japanese companies), CEATEC is a good opportunity to introduce their cutting-edge technologies and concepts to the media and the general public, and this exhibition draws much attention worldwide. CEATEC Japan 2009 official website has been posting news updates, and there have already been many articles on CNET etc. There was also an evening TV news in Japan on 5th (i.e. before the opening) introducing some of the highlights.
Some highlights include future of mobile phones, new concept TV in which operation can be done without a remote control, future robots that can sing and dance or ride a bicycle, future EV car, and future nursing care products including a bed that can become a wheelchair which can be operated automatically by IT and transport system that is more user-friendly than current wheelchairs. It is amazing to see these includes products and companies not only from the traditional IT and electronics companies but also from automobiles (e.g. Nissan). The bed is of Panasonic group that has always been a major player in this exhibition. As far as the author understands, Panasonic used to introduce nursing care products in exhibition specialized in Home Care and Rehabilitation Exhibition only and not at CEATEC.
What is worth noting is that not only IT and electronics business but also automobile and healthcare business that were out of scope of this exhibition in the past also started to converge, creating new concept products, services and business, which implies the ongoing dramatic transformation of respective industries, shaping new competitive landscape in the new ubiquitous networking society. This can be explained by IT marketing principle and theory. As digitalization gets underway, convergence of products and services gets underway leading to lowering of barriers between business domain and industry. Probably the example easiest to understand for everyone is the convergence of digital camera, mobile phone and mobile application connecting to Internet.
Digital convergence has already been creating new market and business involving players from many industries such as online book, music and news, and is opening the door to the new virtualized world like the one depicted in a recent forbes.com article. The author strongly feels that digital convergence has potential to make our lives more convenient and productive in various settings including home, business, education and healthcare/nursing, opening the door to a new world. Whatever the new world may be, the author is very much fascinated by it and is looking forward to it.
References:-
CEATEC Japan 2009 Official Website (English Version)
http://www.ceatec.com/2009/en/news/index.html
Ceatec--gadget extravaganza in Japan
http://news.cnet.com/8301-1001_3-10367757-92.html?part=rss&subj=news&tag=2547-1_3-0-20
Our Virtualized World
http://www.forbes.com/2009/10/06/software-computers-enterprise-technology-virtualization-09_land.html
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