TOKYO - JAPANESE consumer electronics giant Panasonic on Thursday slashed its net profit forecast for the current financial year by 90 percent as the economic crisis pushes down sales.

Japan's electronics giants are facing tougher times after several years of big profits driven by strong sales of flat televisions, digital cameras and mobile telephones.

Despite being a leader in plasma display panels, Panasonic has not been immune to stiff price competition and a worsening global economy.

The company now expects net earnings of 30 billion yen (S$476 million) in the year to March, down from a previous target of 310 billion yen and the previous year's record high of 281.9 billion yen.

The group cut its operating profit forecast by 39 per cent to 340 billion yen and its revenue target by 7.6 per cent to 8.5 trillion yen.

Falling product prices drove down the company's earnings, said Makoto Uenoyama, a Panasonic director in charge of financing and accounting.

'The biggest factor was televisions,' he said. 'We were expecting an annual sales decline of about 20 per cent. But now we are expecting the TV sales to fall 30 per cent. We expect the situation to remain the same next year.' Other Japanese electronic makers have also been hit hard by a stronger yen and a global economic downturn.

Sony last month slashed its operating profit forecast by 57 per cent for this financial year.

Panasonic, which changed its corporate name from Matsushita Electric Industrial on October 1, had been coping fairly well compared with its rivals.

In the last financial year to March it made operating profit of 519.5 billion yen on revenue of 9.07 trillion yen.

It managed to grow its profits by 22 per cent to 128.49 billion yen in the first six months of the current financial year.

But it said in a statement that business conditions were 'deteriorating sharply, due mainly to the rapid appreciation of the yen, sluggish consumer spending and ever-intensified price competition.' 'In addition, there are negative factors such as a write-down of investment securities as a result of the decline in stock prices and business restructuring expenses,' it added.

Panasonic said earlier this month it aimed to acquire troubled rival Sanyo Electric to create Japan's biggest electronics maker.

But top shareholder Goldman Sachs said on Wednesday it had pulled out of talks with Panasonic about selling its stake in Sanyo because the Japanese technology giant's offer was too low.

Panasonic shares fell 4.7 per cent to end at 1,284 yen on Thursday after media reports of an impending profit warning, which came after the close of trade. -- AFP