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Panasonic Goes Negative

Panasonic (NYSE: PC  ) reported earnings on Feb. 3. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q3), Panasonic met expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue improved slightly and GAAP earnings per share dropped to a loss.

Margins contracted across the board.

Revenue details
Panasonic reported revenue of $26.92 billion. The six analysts polled by S&P Capital IQ looked for revenue of $27.11 billion. Sales were 9.6% lower than the prior-year quarter's $26.41 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at -$0.59. The one earnings estimate compiled by S&P Capital IQ anticipated $0.12 per share on the same basis. GAAP EPS were -$1.11 for Q2 versus $0.24 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 24.1%, 190 basis points worse than the prior-year quarter. Operating margin was -0.4%, 460 basis points worse than the prior-year quarter. Net margin was -10.1%, 1,180 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $27.06 billion. On the bottom line, the average EPS estimate is -$0.68.

Next year's average estimate for revenue is $106.93 billion. The average EPS estimate is -$2.62.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 237 members out of 262 rating the stock outperform, and 25 members rating it underperform. Among 57 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 53 give Panasonic a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Panasonic is hold, with an average price target of $11.96.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On February 06, 2012, at 10:18 PM, kuala1313 wrote:

    Like most Japanese companies, Panasonic has suffered through about as bad of a series of negative events as any company could endure. Yet they still have their eye on the future and have invested heavily in the future of automobiles by setting a goal to be a top supplier of hybrid batteries. The next 10 years will be an era when the demand for lithium ion batteries is great and the supply painfully short with premium prices. As the former owner of a gas station and current owner of two hybrid vehicles, I think that is a great strategy for when oil hits new record levels. And that doesn't even take into account the massive upcoming changes in 3D and internet TVs, pads and phones that will dominate the near future of electronics. Every hotel in the country will soon be replacing their old tube TVs and Panasonic has one of the best commercial lodging LCD TVs on the market.

    The stock has certainly responded to the short term outlook and massive write off. What better time is there to go all in on a great company at the bottom of its economic cycle? The upside is enormous at such a low cost per share today. I'm looking for a 20 bagger in the next 10 years. This looks like a no brainer, yet I haven't seen any suggestions to buy from the Motley Fool experts.

    What am I missing?

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