Pioneer Forecasts Deeper Full-Year Loss, Replaces President
Thursday, October 30, 2008 12:10 AM PDT
A steep decline in sales of home electronics and lower sales of car electronics led Japan's Pioneer on Thursday to replace its president and to sharply revise down financial estimates for the entire year. The company now expects losses this year to be four times as bad as previously expected.
Pioneer said it expects to lose ¥78 billion (
US$801 million) this year, that's considerably worse than the ¥19 billion loss it had been expecting. Pioneer also cut its sales forecast by 10 percent to ¥700 billion.
The forecast revision was announced at the same time as the company disclosed its quarterly financial report for the July to September period.
During the three months Pioneer lost ¥45 billion compared to a loss of ¥2 billion during the same period last year. Sales fell 13 percent on the year to ¥166 billion.
Revenue from its home electronics division fell by 30 percent in the quarter when compared to the same period last year. Sales of PDP (plasma display panel) television sets and DVD drives were down. Pioneer recently cut back the number of PDP TVs sets it offers in face of strong price competition. Overall the home electronics division saw increased operating losses during the period.
In the car electronics sector sales were down 8 percent on the year on lower sales of car audio products. A bright point was increased sales of car navigation systems, especially in Europe. The business unit saw an 82 percent drop in operating profit.
The first casualty of the poor performance will be Tamihiko Sudo, Pioneer's president, who was voted out of his position by the company's board at a meeting on Thursday morning. He will resign his post on Nov. 15, to be replaced by Susumu Kotani, who is currently managing director at the company.
Under Kotani Pioneer will speed up a restructuring plan that could see further job losses. Sudo, the outgoing president, will remain at Pioneer as a director to assist in the restructuring.
