Tablet boom driving Panasonic back to profit

Panasonic's display business is on track for its first profit in five years in January-March, driven by stronger sales of liquid crystal display (LCD) panels for tablets and PCs.

As Panasonic draws back from money-losing TVs, it is looking to boost sales of smaller LCD panels used in tablets and mobile phones, a strategy also being pursued by rival Sharp.

Panasonic, Sharp and Sony have been battered by declining TV sales and a strong yen that makes their products look expensive when lined up against innovative designs from South Korean competitors and others.

Panasonic has warned it will lose close to $US10 billion this year as it writes off tax deferred assets and goodwill across businesses and prepares for a restructuring. Finance chief Hideaki Kawai said a fifth of Panasonic's 88 business units are losing money and only half meet a 5 percent operating margin target.

Small LCD panels will likely make up around 60 percent of the unit's sales in the six months to March, double their first-half contribution, display unit boss Yoshio Ito said.

"We are now making displays for more than 10 models of tablets and PCs," he said.

Making money again from LCD panels will help cover continued losses from plasma displays, which are difficult to make in smaller sizes, Ito said, adding the plasma part of the business would still lose money in January-March.

Ito and other Panasonic managers are under pressure from new company president Kazuhiro Tsuga to raise their game. Tsuga has said that any division failing to hit at least the 5 percent operating margin target within three years will be shut or sold.

From April, Tsuga will begin weeding out the weakest among Panasonic's businesses - which churn out a vast range of goods from fridges and shavers to solar panels and batteries.

Panasonic's audiovisual division, which includes Ito's panel business, lost 2.1 billion yen ($A25 million) in July-September as sales fell 7 percent from a year earlier. For the full year, the unit cut its operating profit forecast to 36 billion yen from a previous 121 billion yen.

Panasonic shares, which have been trading around multi-decade lows, closed up 1.8 percent on Thursday at 395 yen.