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Most Japanese Electronics Companies Report Improved Earnings - 2004-04-30

Improved earnings are being reported at most Japanese electronics companies, but Sony is an exception. And there are changes taking place in the boardrooms of Japanese automakers.

Electronics and entertainment giant Sony says its costly restructuring is taking a toll on profit. Sony says for the previous fiscal year the company posted a group net profit of $800 million, down 23 percent from a year earlier.

Sony Chief Financial Officer Takao Yuhara says strong sales of digital cameras, flat-panel televisions and DVD recorders are helping to boost revenues in the current fiscal year.

Mr. Yuhara, however, cautions that there are potential risks to the profit picture because of foreign exchange swings, price competition and higher material costs.

For the year ending March 2005, Sony forecasts a net profit of nearly $1 billion, that would be a 13 percent rise. But that figure is lower than many analysts have been anticipating.

In contrast, Sony's competitor Sharp, the world's largest maker of flat screen televisions, has reported an 86 percent rise in annual net profit, to $560 million.

Company president Katsuhiko Machida attributes much of the gain to strong sales of flat screen TV sets.

Mr. Machida also says the company expects another year of record group profits - about $700 million, because of strong demand for digital appliances.

Other high-tech companies, including Matsushita Electric, NEC and TDK are also reporting improved earnings.

There are some changes in the boardrooms at Japanese auto makers.

Mitsubishi Motors says its chief executive and president, Rolf Eckrodt, has resigned. Mr. Eckrodt left just days after the automaker's chief shareholder, DaimlerChrysler, announced it will not pump any additional funds into the ailing company.

Honda Motor chairman, Yoshihide Munekuni, will step down from his post and become an adviser at the end of June. He has been chairman for seven years, a record for that post at Honda. The company says no one else will be named immediately to fill the position.

Honda says its annual operating profit hit a record in the last fiscal year of more than $4 billion, but it is forecasting a tough year ahead, because the stronger yen will cut earnings from overseas sales.

Despite further signs of improvement for Japan's big corporations, there are still some road bumps on the path to economic recovery. Government data for March, released Wednesday, show retail sales in Japan fell 2.3 percent from a year earlier. In contrast, sales in February rose 1.8 percent.