The Difficulties of Panasonic and Samsung Stock over the Past 10 Year

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Running head: Panasonic/Samsung

The difficulties of Panasonic and Samsung Stock over the Past 10 Year Financial Accounting: Statement Analysis & Decision Making BE 310M By: The Four Elements: Brenda Clay-Ozenne

School of New Dimensions Albertus Magnus College
May 5, 2013

This paper was prepared for Financial Accounting, BE 310M, taught by Instructor Mark Vausio.

Running head: Panasonic/Samsung

What has these two Companies been doing over the past ten years? Well according to their Company’s profile and stock reports, they have not been doing very well over the past 2-3 years. Panasonic has not shown a very favorable return on their stocks in the last 3 years. "Their historic leadership in key areas such as TVs, audio devices, mobile phones[->0] - it's been eroded by the likes of Samsung and Apple. In addition, it has been too long since they have come up with successful, market-leading must-have products. We don't see this changing over the next 2, 3 years.” [1] Panasonic Better Positioned

To turn around its fortunes, Panasonic, maker of the Viera TV, is looking to expand its businesses in appliances, solar panels[->1], lithium batteries, and automotive components. Appliances account for around only 6 percent of the company's sales, but generate margins of more than 6 percent and make up a big chunk of operating profit, Reuters reported. (Read More: Panasonic Cleans House with Write downs, Sees $9.6 Billion Loss) Sony, creator of the Walkman cassette and CD player, is focusing on consumer gadgets such as digital cameras and gaming devices. Jamieson said Panasonic is in a better position than Sony to survive the slump because it has a stable business of durable goods such as fridges and washing machines. "Although Panasonic is facing weak competitiveness in its core TV business, particularly the panels and TVs, it has the advantage of a relatively stable consumer electronics division that is still generating positive margins," he said. However, for the two firms to stage a genuine turnaround, something they have failed to achieve so far, they will "need to bite the bullet and completely exit some of their loss-making businesses.” Jamieson said. "They need to curb, or completely exit their loss-making businesses and focus on their key strengths and these business lines[->2], where they are able to generate profitability and rediscover that kind of technology leadership which historically they were famous for," he told CNBC. [1] With this being said just what has their stock options looked like over the past three years, not a very pretty picture. Revamping of their appliances and electronics division is definitely in order. Let us look at their last stock report. Panasonic 5 year report

[->3]

The next company that we are going to look at is Samsung and their overall report on their company and their stock report over the past 2-3 years. “Samsung Corporation is for the most part doing very well; they have had an increase of over 60% in sales and in their stock reports. Who could ask for better but let us take a better look at the company Samsung just reported quarterly earnings[->4] that look spectacular from 10,000 feet … but on closer inspection show some worrisome signs. Year-over-year, the 7.15 million won (about $6.4 billion) net profit for this year’s first quarter was an improvement of 42%, which certainly is impressive. However, that is very different from the 81% improvement from Q1 2011 to Q1 2012. It is also just a 1.4% improvement from Q4 2012′s 7.05 trillion won. What all of this means is that Samsung’s pace of growth has been slowing — troubling trends for shareholders, who have...
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