Japan's Sanyo braces for zero profit

Japan's struggling Sanyo Electric Co. is set to downgrade its earnings forecasts for the year to March, expecting a strong yen to wipe out its net profit almost entirely, according to a report.

Sanyo, which is to become a subsidiary of Panasonic Corp. later this year, will lower its forecast for group net profit from 35 billion yen (384 million dollars) to almost zero for the full year to March, the Asahi Shimbun said.

Its forecast of operating profit would be revised down by 40 percent to 30 billion yen from 50 billion yen, with sales expected to fall below two trillion yen for the first time in nine years, it said.

The company's earnings from microchip and other electronics parts are rapidly worsening due to the yen's appreciation, the Asahi said.

The company will announce the revised forecasts this week, the newspaper said without citing its sources.

The yen was trading at around 91 to the dollar at the end of last week, compared with above 99 at the end of March last year.

No comment on the report was available from Sanyo on Sunday.

Source : AFP
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]