Sagging Profit Margin Forces Electronics Giant Sanyo to Retrench

For years, Sanyo Electric Co. could count on steady profits from a vast product line that covered the waterfront of consumer electronics from toasters to wide-screen televisions.

Yet now these far-flung products are starting to weigh heavily on the earnings of the Osaka-based company, leading some to wonder whether the company can still afford to be all things to all people.

“Sanyo has too many product lines,” said Makio Inui, industry analyst at Kleinwort Benson Securities.

While the company is far from performing that kind of radical surgery, Sanyo is trying to fix things on several fronts. At home, it is casting around for new products while pruning costs. Abroad, it is moving production to cheaper locales, while trying to tap emerging markets such as China.

Sanyo’s pretax profits for the half-year ended May 31 plummeted 77.27% to $20.45 million, while sales fell 8.4%.