TOKYO: Earnings gaps among major Japanese electronics makers are becoming clear, with companies including Sony Group Corp. and Hitachi Ltd. thriving while Panasonic Corp. and Toshiba Corp. facing difficult times.

In fiscal 2020, which ended in March, Sony Group’s consolidated net profit topped 1 trillion yen for the first time ever. Hitachi also saw its net profit reach record heights.

They achieved the stellar performances as they revamped their business structures by accurately understanding changes in society and the business environment, analysts said.

“We are seeing drastic changes in the environment, so management leaders’ will to keep advancing is important,” Sony Group Chairman, President and CEO Kenichiro Yoshida said at a business strategy meeting last Wednesday.

The company suffered a net loss in six of the seven years from fiscal 2008, when it struggled amid the fallout of the collapse of U.S. investment bank Lehman Brothers.

Sony Group overcame the slump by boldly reviewing its business structure. Specifically, the company expanded its operations to gaming, financial services and movies in order to build a system enabling it to continuously generate stable earnings through fee revenue and other gains.

As a result, the company was able to boost its profits in fiscal 2020 as it met demand from people staying at home amid the novel coronavirus pandemic.

Hitachi has been accelerating a shift to a business structure centering around information technology. IT operations now account for more than half of the firm’s consolidated operating profit.

Ryosuke Katsura, senior analyst at SMBC Nikko Securities Inc., who is versed in the electronics industry, said, “Sony Group and Hitachi have made management decisions based on clear visions.”

Meanwhile, Panasonic has repeatedly carried out restructuring measures in response to slumps in earnings. But the proportion of sales of home appliances such as air conditioners and refrigerators in its overall sales remains high.

In addition, Panasonic’s business on automotive batteries for supply to U.S. electric vehicle maker Tesla Inc. has failed to perform strongly although it made massive investment in the area.

Toshiba, which had sold its memory chip operations to make up for its business slump, has still been unable to fully cover the loss of revenue from the sale.

JIJI Press