LG, Samsung Quarterly Earnings Up, While Mixed Economic Signals Persist
Earnings call week - that quarterly rite of finance - can be overwhelming in tranquil times. In this tumultuous period, the messages are neck-twisting. LG and Samsung way up. Sony, Panasonic and Sharp down. Motorola fairly even, which can be declared a small victory. Adding to the directional uncertainty: Friday's quarterly Gross Domestic Product data, which had a bright side (the rate of decline was only 1% compared to more than 6% drops in the previous two quarters) but a bodacious caveat: big-ticket items and durable goods purchases were down 7.1%, according to government statistics. Talk about mixed signals!
Predictably, there are endless rationalizations for the divergent financial reports. Sony's second consecutive quarterly loss ($391 million in the quarter ending June 30) are largely blamed on the slump in videogames and digital cameras, But Sony admitted "challenges" on many fronts, including its mobile handset joint venture with Ericsson and on-going concerns about the exchange rate of the yen.
Panasonic's $560 million net loss in the April-June period came despite dramatic cost cutting and restructuring. It revenues fell 25% from the same period in 2008. Panasonic also cited declining digital camera sales, but it predicts a 50% growth in large-screen flat TV sales during this fiscal year - with the emphasis on high-margin 50 inches and larger sets.