Matsushita Posts 370% Earnings Gain in 1994 : Electronics: But the company expects to post loss for 1995 because of exchange rate loss on last month’s sale of MCA Inc.
Matsushita Electric Industrial Co. said Wednesday that its earnings for last year more than tripled, but it forecast a loss for this year because of its sale of an 80% stake in MCA Inc.
Matsushita, the world’s largest consumer electronics maker, said its earnings soared to $1.04 billion for the fiscal year ended March 31, from $281 million the previous year. Sales rose to $79.8 billion from $76.0 billion.
Analysts said the company, which owns the Panasonic, National and Technics brands, turned in a good earnings performance on the back of strong demand, particularly in Asia and the United States.
Osaka-based Matsushita also cited cost-cutting efforts as one reason for the recovery.
But Chief Financial Officer Motoi Matsuda said the company will suffer a massive foreign exchange loss on last month’s sale of its stake in U.S. entertainment giant MCA to Canadian beverage group Seagram Co. for $5.7 billion.
“Working with a dollar rate of 85 yen, Matsushita’s sale of MCA is likely to show up in our accounts as a 165 billion yen [$1.89 billion] foreign exchange loss,” he said.
Matsushita cited unanticipated changes in the American media market for the sudden sale, which followed a well-publicized dispute over management autonomy between senior Matsushita and MCA executives.
The exchange loss results from the yen’s rise against the dollar since Matsushita bought Los Angeles-based MCA for $6.1 billion in 1990.
Because of that loss Matsushita is likely to report a group net loss of $735 million in the year ended next March 31, Matsuda said.
Otherwise, group net profits would have risen 19% to $1.16 billion, he added.
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