Panasonic forecasts 90 percent drop in profits this year

The company, which is Japan's largest consumer electronics manufacturer, now expects net profit for the year to be Ľ30 billion (US$315 million), down sharply from the previously forecast profit of Ľ310 billion. Sales are expected to be Ľ8.5 trillion, revised down from Ľ9.2 trillion.

"The current financial crisis originated in the U.S. has spread across the world and the business sentiment in Japan and overseas has significantly worsened," Panasonic said in a statement. "Under these circumstances, the company's business conditions are deteriorating sharply, due mainly to the rapid appreciation of the yen, sluggish consumer spending and ever-intensified price competition."

With the revised targets Panasonic is forecasting a contraction of its business this year compared to last year. If attained the new forecasts will mean a drop in sales of 6.6 percent a drop in net profits of 89 percent from last year.