By Makiko Yamazaki
TOKYO (Reuters) - Japan's electronics maker Panasonic Corp (T:6752) and industrial conglomerate Hitachi Ltd (T:6501) on Wednesday cut their full-year profit forecasts, citing concerns over slowing economic growth in China.
China's economy grew at its weakest pace in a quarter of a century last year, and industries ranging from smartphones to real estate are saddled with excess capacity or inventories. Japanese companies have grown increasingly dependent on the world's second-biggest economy.
Panasonic, which depends on China for around 13 percent of its sales, forecast an operating profit of 410 billion yen (2.35 billion pound) for the year ending March 31, down from a previous estimate of 430 billion yen.
"In China, sales of home appliances slackened due to excessive inventories in the market," Panasonic's Senior Managing Director Hideaki Kawai told reporters. "It will take some time for the inventories to come down to an appropriate level."
Panasonic has reinvented itself as a maker of high-end home appliances and high-tech parts for cars and energy-efficient homes, shifting away from the highly competitive smartphones, plasma TVs and semiconductor chips businesses.
In the October-December quarter, Panasonic said operating profit increased to 119.8 billion yen from 113.3 billion yen year-on-year, thanks to brisk sales of high-end home appliances in Japan. However, that was slightly lower than an average forecast of 122.9 billion yen in a Thomson Reuters survey of six analysts.
It also lowered its full-year sales estimate to 7.55 trillion yen from 8 trillion yen previously forecast, predicting a 2.1 percent year-on-year decline.
Hitachi, which sells everything from computer servers and elevators to nuclear power plants, cut its full-year operating profit forecast to 630 billion yen from an earlier 680 billion estimate.
It generates about 22 percent of its revenue from its second biggest market of Asia, excluding Japan, according to its website.
Hitachi's CFO Toyoaki Nakamura told a news conference that sales had been slowing in China, citing for example its elevator business.
"Buildings are going up, but in some areas there are condominiums that can't find tenants, for example. This correction will take time," he said.
Panasonic shares have fallen around 21 percent over the past year, while Hitachi shares have fallen around 35 percent.