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Last Updated : Jul 28, 2011 11:31 AM IST | Source: Reuters

Japan's quake-hit technology companies to show recovery

Japan's biggest consumer electronics makers are expected to show quarterly earnings slumped due to the March earthquake, but investors will focus on whether these companies can meet their forecasts for a swift recovery, given a fragile global economy.


Japan's biggest consumer electronics makers are expected to show quarterly earnings slumped due to the March earthquake, but investors will focus on whether these companies can meet their forecasts for a swift recovery, given a fragile global economy.


Average estimates show Panasonic and Sharp are set to slide into the red for the quarter, while Nintendo is forecast to report a slender operating profit of 10 billion yen (USD 127 million).


Profits at Sony, which has been reeling from a series of security breaches on its networks and found itself outmanoeuvred by Samsung Electronics and Apple Inc, are also expected to drop.


Panasonic for its part is trying to tighten up by selling its white goods units held by subsidiary Sanyo, three sources familiar with the deal said Thursday. Panasonic is using the USD 130 million deal to eliminate businesses that overlap with Sanyo.


Most of the electronics conglomerates have forecast earnings for the year to March 2012 to stay flat or show a small decline from a year ago, underscoring a strong comeback from the disaster-related production difficulties in Japan.


However, doubts about the prospects for the rest of the year are creeping due to the yen's renewed rise against the dollar and the euro , which has been fuelled by jitters about government debt.


Global consumer confidence fell in the second quarter to its lowest level in 18 months on the euro zone debt crisis, the uncertain economic outlook and rising inflation, Nielsen said in a survey published last week.


The United States is teetering on the verge of a government debt default, while China's import growth is expected to slow in the second half of the year


At home, Japan's consumer sentiment is improving slightly after being battered by the March 11 quake and tsunami.


Last-minute demand for replacement televisions ahead of the end of analogue broadcasting in Japan this month will also likely boost Sharp, whose sales are focused on the local market.


Shares in most Japanese consumer technology companies have been pummelled by the quake, with Nintendo down about 40% since March 10, the day before the disaster, and Sony losing nearly 30%.


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First Published on Jul 28, 2011 10:52 am
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