Global TV Sales Down: Sony, Sharp Post $11 Billion Loss

Global TV Sales Down: Sony, Sharp Post $11 Billion Loss

Research  these Stocks on Kapitall’s Playground Now

 
research now

Japanese electronic companies Sony and Sharp posted a combined $11 billion loss on Tuesday led by less than forecast TV sales. (STAY AHEAD OF THE CURVE: Follow Kapitall on Twitter)

The loss in TV and other electronic sales (the effects of which can also be seen on electronic retailers like Best Buy) was more than twice what Sony had predicted and 31% greater than Sharpe had predicted. Losses were 520 billion yen and 280 billion yen, respectively.

"The situation is critical and we will carry out drastic reform. Nothing is sacred," said Sony Chief Financial Officer Masaru Kato said yesterday in Tokyo. "Turning around our TV business is a top priority."

According to DisplaySearch, global TV shipments fell for the first time in 6 years because of excessive inventory in the U.S. and Europe and an end to Japanese government subsidies for electronic purchases.

Other Factors

According to Bloomberg there are a number of other factors that have hampered the profits of Japan’s leading electronic companies:

- Lost market share to Apple Inc. (AAPL) and Samsung Electronics Co.
- The Yen reached a postwar high and prompted government intervention
- The aftermath of last year's quake and Thai floods
- "Sony's new President, Kazuo Hirai, may have to raise equity and cut jobs"
- "Sharp has turned to Taiwan's Foxconn Technology Group for a $1.6 billion infusion" 

Business Section: Investing Ideas

Since many of the problems that impacted Sony and Sharp were regional, we were wondering if there were other Japanese stocks that might be in trouble.

We ran a screen on the Japanese companies trading on the U.S exchanges and found six with negative inventory turnover trends: meaning revenue is growing slower than inventory, which may indicate that the company is having trouble selling its inventory – although this might just indicate inventory building or a change in sales policies.

We list them below. How do you think their earnings will look? Can we expect more surprises to the downside?

 

Interactive Chart: Use the Compar-O-Matic to compare analyst ratings for the stocks mentioned below:

 

 

“1. Advantest Corp. (ATE, Earnings, Analysts, Financials): Manufactures and sells semiconductor and component test system products, and mechatronics-related products. Revenue grew by 20.63% during the most recent quarter ($30,695M vs. $25,445M y/y). Inventory grew by 37.82% during the same time period ($33,320M vs. $24,177M y/y). Inventory, as a percentage of current assets, increased from 17.21% to 26.79% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

 

“2. Canon Inc. (CAJ, Earnings, Analysts, Financials): Manufactures and sells network digital multifunction devices (MFDs), plain paper copying machines, laser printers, inkjet printers, cameras, and lithography equipments primarily under Canon brand in the Americas, Europe, Asia and Oceania. Revenue grew by -9.66% during the most recent quarter ($964,757M vs. $1,067,866M y/y). Inventory grew by 23.89% during the same time period ($476,704M vs. $384,777M y/y). Inventory, as a percentage of current assets, increased from 18.06% to 22.14% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

 

“3. Hitachi Ltd. (HIT, Earnings, Analysts, Financials): Manufactures and sells electronic and electrical products primarily in Asia, North America, and Europe. Revenue grew by 0.07% during the most recent quarter ($2,264,947M vs. $2,263,445M y/y). Inventory grew by 13.27% during the same time period ($1,672,430M vs. $1,476,440M y/y). Inventory, as a percentage of current assets, increased from 29.63% to 32.51% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

 

“4. Kyocera Corp. (KYO, Earnings, Analysts, Financials): Develops, produces, and distributes ceramic, semiconductor, and electronic products for the information and communications markets, and environment and energy markets worldwide. Revenue grew by -12.02% during the most recent quarter ($281,121M vs. $319,522M y/y). Inventory grew by 25.36% during the same time period ($263,696M vs. $210,349M y/y). Inventory, as a percentage of current assets, increased from 19.68% to 23.96% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

 

“5. Makita Corp. (MKTAY, Earnings, Analysts, Financials): Manufactures and sells a range of electric power tools worldwide. It offers drills that are used to drill metals, woods, and plastics, which include pistol-grip drills, D-handle drills, spade-handle drills, and angle drills, as well as cordless drills and cordless driver drills; grinders comprising portable disc grinders and bench grinders used for smoothing and finishing on metal; sanders that include disc sanders, orbital sanders, and belt sanders for smoothing and finishing on metal, wood, stone, and concrete; and rotary hammers for the construction industry. Revenue grew by -0.18% during the most recent quarter ($70,637M vs. $70,762M y/y). Inventory grew by 26.2% during the same time period ($117,945M vs. $93,457M y/y). Inventory, as a percentage of current assets, increased from 36.59% to 45.84% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

 

“6. Panasonic Corporation (PC, Earnings, Analysts, Financials): Develops, manufactures, and sells electronic products worldwide. Revenue grew by -14.23% during the most recent quarter ($1,960,200M vs. $2,285,413M y/y). Inventory grew by -7.78% during the same time period ($872,253M vs. $945,881M y/y). Inventory, as a percentage of current assets, increased from 25.07% to 28.26% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

 

 

(Written by Rebecca Lipman. Accounting data sourced from Google Finance.)

 

Use Kapitall's Tools: Looking for ways to analyze this list?

Use this article snapshot as a launch pad (click here for help): Simply click on the links, and use Kapitall's tab navigation to browse through the data…

 

Analyze These Ideas: Getting Started

Dig Deeper: Access Company Snapshots, Charts, Filings

New to Kapitall?

1. New to the site? Click here to register for a free account, and gain access to more tools and data
2. Looking for more investing ideas like this? Click here to sign up for your free copy of Kapitall Weekly
3. Follow us on SeekingAlpha, Motley Fool, Nasdaq and Twitter

 

 

 

playthemarket640jpg

Leave a Reply

Protected by WP Anti Spam

playthemarket280jpg