Matsushita Reports First Quarter Results / Sales and

Earnings Impacted by Economic Conditions Osaka, Japan (PROTEXT) - Matsushita Electric Industrial Co.,Ltd. (NYSE: MC) today reported its consolidated financial resultsfor the first quarter, ended June 30, 1999, of the current fiscalyear ending March 31, 2000. First-quarter Results Consolidated group sales for the first quarter decreased 6% to1,755.4 billion yen (U.S.$14.51 billion), from 1,875.8 billionyen in the same period a year ago. Domestic sales decreased 1% to853.2 billion yen (U.S.$7.05 billion), down from 862.9 billionyen a year ago. Domestic sales in consumer products continued todecline, however, within the industrial products and componentssectors several product lines showed signs of recovery. Althoughdeclining consumer confidence and financial industry difficultiesappear to have abated, consumer spending and capital investmentswere affected by lingering adverse economic conditions. Overseas sales decreased 11% to 902.2 billion yen (U.S.$7.46billion), compared to 1,012.9 billion yen in the first quarter ofthe previous year. Economic conditions in North America continuedto be strong backed by brisk consumer spending. However, overseassales were negatively influenced overall by a strong yen,decreased sales in the CIS, Latin America, and China, and slowedEuropean economic growth. Although Asian economies showed partialsigns of recovery, sales in Southeast Asia remained weak. Profits were negatively impacted by further intensified pricecompetition, decreased domestic sales of consumer products, and astrong yen. This occurred despite continued efforts to lowerproduction costs and increase overall efficiency. Operatingprofit for the quarter declined 57% to 14.4 billion yen (U.S.$119million), compared to 33.1 billion yen a year ago. Income beforeincome taxes fell 12% to 33.0 billion yen (U.S.$273 million),compared to 37.7 billion yen a year ago. Net income decreased 14%to 9.6 billion yen (U.S.$79 million), compared to 11.1 billionyen a year ago. Matsushita noted that pretax income for thisfirst quarter included a one-time non-operating profit of 7.2billion yen from the sale of shares of a U.S. communicationsoperator. Consolidated net income per common share for the quarter was4.55 yen (38 cents per American Depositary Share, eachrepresenting 10 shares of common stock), compared to 5.10 yen percommon share in the quarter a year ago, on a diluted basis. First-quarter Sales Breakdown by Product Category The Company's first-quarter consolidated sales by majorproduct categories are summarized as follows: Consumer Products Consumer products sales fell 13% to 706.9 billion yen(U.S.$5.84 billion), compared to the same period a year ago. Total sales of videoand audio equipment decreased 16%. This decline reflectedsluggish domestic demand for televisions and VCRs, and decreasedoverseas sales in Southeast Asia, China and the CIS. Steady salesgrowth of audiovisual (AV) equipment in North America such astelevisions and DVD players, was insufficient to offset thesenegative factors and lower overseas sales revenue due to thehigher yen exchange rate. Although the Company's campaign of "product firsts," includingits centrifugal force washing machine, continued to receivefavorable market response, overall home appliances and householdequipment sales remained depressed, decreasing 10%. Industrial Products Sales of industrial products for the first quarter were 674.9billion yen (U.S.$5.58 billion), down 3% from the same periodlast year. Sales of information and communications equipmentdecreased 6%. While sales of mobile communications equipment suchas cellular phones and personal computers continued experiencingstrong growth, sales of computer peripherals such as PC displaysand hard disk drives decreased due to price declines. Sales of industrial equipment grew 6%, reflecting rapidexpansion of car AV equipment in both overseas and domesticmarkets and a turnaround in factory automation equipment sales inJapan. Components Sales of components increased 2% to 373.6 billion yen(U.S.$3.09 billion). This increase is attributed to sales ofsemiconductors, liquid crystal display panels, and compressorsfor use in air conditioners, all of which recorded double-digitsales growth. Outlook for the Fiscal First Half Based on its first quarter results, Matsushita today announcedforecasts for consolidated sales and earnings for the first sixmonths ending September 30, 1999. Half-year group sales areforecast to decrease 9% from the previous year's six-monthperiod, to approximately 3,560 billion yen. Assuming the currentconditions continue, the Company expects first-half operatingprofit to decline 56% to approximately 46 billion yen.Consolidated pre-tax income is anticipated to decrease 4% toapproximately 63 billion yen, and six-month net income isexpected to increase 95% to about 18.5 billion yen. In the aboveforecasts, the smaller decrease rate in pre-tax income and theincrease in net income are mainly due to the expectation that anon- operating loss on valuation of investment securities willnot be incurred in this first half period. The Company incurredsuch a loss at the end of last year's first half. Statements made in the Outlook for the Fiscal First Half andother statements herein that are not historical facts areforward-looking statements about the future performance ofMatsushita and its group companies which are based onmanagement's assumptions and beliefs in light of informationcurrently available to it and involve risks and uncertainties.Actual results may differ materially from these forecasts.Potential risks and uncertainties include, but are not limitedto: general economic conditions in Matsushita's major markets,particularly Japan and elsewhere in Asia, the United States andEurope; general consumer spending; rapid exchange ratefluctuations, particularly between the yen and U.S. dollar, euroand other currencies in which Matsushita makes significant salesor in which Matsushita's assets and liabilities are denominated;direct and indirect restrictions by other countries of imports,or exchange or other limitations imposed by other countries inwhich Matsushita conducts significant production and marketingoperations; fluctuation in market prices of securities of whichMatsushita has substantial holdings; and Matsushita's ability tomaintain its strength in many product and geographical areas,through such means as new product introductions, in a market thatis highly competitive in terms of both price and technology,pertinent to the industry to which the Company primarily belongs. Matsushita Electric Industrial Co., Ltd. is one of the world'sleading producers of electronic and electric products forconsumer, business, and industrial use, which it markets aroundthe world under the "Panasonic", "National", "Technics", and"Quasar" brand names. Matsushita's shares are listed outsideJapan on the Amsterdam, Dusseldorf, Frankfurt, New York, Pacific,and Paris stock exchanges. Matsushita Electric Industrial Co., Ltd. and ConsolidatedSubsidiaries

Financial Summary

(Three months ended June 30)

Yen

U.S.Dollars

(billions)

Percentage(millions)

1999

1998

1999/19981999 Net sales

1,755.4 y 1,875.8 y

94%$14,508 Operating profit

14.4

33.1

43%119 Income before income taxes

33.0

37.7

88%273 Net income

9.6

11.1

86%79 Net income per share, basic per common share

4.63 yen 5.26 yen

4cents per American Depositary

Share (ADS)

46 yen

53 yen

38cents Net income per share, diluted per common share

4.55 yen 5.10 yen

4cents per ADS

46 yen

51 yen

38cents Notes to consolidated financial statements:

1. The Company's consolidated financial statements areprepared in conformity with the United States generally acceptedaccounting principles. 2. The Company has not applied SFAS No.115 in accounting forcertain investments in debt and equity securities. If SFAS No.115had been adopted as of June 30, 1999, and March 31, 1999, thecombined carrying amounts of marketable securities andinvestments and advances would increase by 210.1 billion yen($1,736 million) and 197.6 billion yen, respectively.Stockholders' equity would also increase by 117.6 billion yen($972 million) and 109.1 billion yen, on the respective dates. 3. For the fiscal first quarter ended June 30, 1999,comprehensive income totaled 23.4 billion yen ($194 million), ascompared to 73.9 billion yen in the comparable first quarter ayear ago. In calculating comprehensive income, the Company hasapplied SFAS No. 115. Comprehensive income includes net income,increases in cumulative translation adjustments, and unrealizedholding gains of available- for-sale securities. 4. Number of consolidated companies: 327 5. Number of companies reflected by the equity method: 60 6. United States dollar amounts are translated from yen forconvenience at the rate of U.S. $1.00 =121 yen, the approximaterate on the Tokyo Foreign Exchange Market on June 30, 1999. 7. Each American Depositary Share (ADS) represents 10 sharesof common stock.

Matsushita Electric Industrial Co., Ltd.

Consolidated Statement of Income *

(Three months ended June 30)

Yen

U.S.Dollars

(millions)(millions)

1999

19981999 Net sales

1,755,406 y 1,875,846 y$14,508 Cost of sales

(1,241,704) (1,306,078)(10,262) Selling, general and administrative expenses

(499,351)

(536,647)(4,127) Operating profit

14,351

33,121119 Other income (deductions): Interest and dividend income

15,132

19,587125 Interest expense

(12,129)

(16,667)(100) Other income (loss), net

15,685

1,618129 Income before income taxes

33,039

37,659273 Provision for income taxes

(19,208)

(21,228)(159) Minority interests

(6,965)

(1,816)(57) Equity in earnings (losses) of associated companies

2,686

(3,499)22 Net income

9,552 y

11,116$79 y (Parentheses indicate expenses or deductions.) * See Notes to consolidated financial statements above.

Supplementary Information

(Three months ended June 30)

Yen

U.S. Dollars

(millions)

(millions)

1999

1998

1999 Depreciation:

85,875 y

87,707 y

$ 710 Capital investment:

68,285 y

80,019 y

$ 564 R&D expenditures:

127,936 y 123,046 y

$ 1,057 Total employees (June 30): 287,413

287,516

Matsushita Electric Industrial Co., Ltd.

Consolidated Balance Sheet *

(As of June 30, 1999)

With Comparative Figures for March 31, 1999

Yen

U.S.Dollars

(millions)(millions) Assets

June 30, 1999 March 31, 1999 June 30,1999 Current assets:

Cash

1,535,620 y 1,529,584 y $ 12,691

Marketable securities

127,815

128,328

1,056

Trade receivables and

other current assets

1,708,695

1,732,731

14,122 Inventories

1,053,190

1,018,663

8,704 Total current assets

4,425,320

4,409,30636,573 Noncurrent receivables

284,039

276,3112,347 Investments and advances

1,316,609

1,279,82810,881 Property, plant and equipment, net of accumulated depreciation

1,481,140

1,493,55112,241 Other assets

477,808

479,2523,949 Total assets

7,984,916 y 7,938,248 y $65,991 Liabilities and Stockholders' Equity Current liabilities:

Short-term borrowings

684,367 y

650,147 y $ 5,656

Trade payables and

other current liabilities 1,953,809

1,940,792

16,147 Total current liabilities

2,638,176

2,590,939

21,803 Long-term liabilities

1,198,121

1,205,174

9,902 Minority interests

616,393

609,080

5,094 Common stock

209,502

209,444

1,732 Capital surplus

567,877

567,696

4,693 Retained earnings

2,904,502

2,910,932

24,004 Cumulative translation adjustments

(149,403)

(154,765)

(1,235) Treasury Stock

(252)

(252)

(2) Total liabilities and stockholders' equity

7,984,916 y 7,938,248 y $ 65,991 * See Notes to consolidated financial statements above.

Matsushita Electric Industrial Co., Ltd.

Consolidated Sales Breakdown * **

(Three months ended June 30

Yen

U.S.Dollars

(billions) Percentage(millions)

1999

1998 1999/19981999 Consumer products Video and audio

equipment

391.9 y 464.7 y 84% $3,239

Home appliances and

household equipment

315.0

349.5 90% 2,603

Subtotal

706.9

814.2 87% 5,842 Industrial products Information and

communications

equipment

507.1

535.8 94% 4,191

Industrial equipment

167.8

158.9 106% 1,387

Subtotal

674.9

694.7 97% 5,578 Components

373.6

366.9 102% 3,088 Total

1,755.4 y 1,875.8 y 94% $14,508

Domestic sales

853.2

862.9 99% 7,052

Overseas sales

902.2

1,012.9 89% 7,456 [Domestic/Overseas Sales Breakdown] (in yen only)

Yen (billions)

Yen (billions)

Domestic Sales Percentage Overseas SalesPercentage

1999

1999/1998 1999

1999/1998 Consumer products Video and audio

equipment

128.0 y

82%

263.9 y

86% Home appliances and

household equipment

227.6

94%

87.4

82% Subtotal

355.6

89%

351.3

85% Industrial products Information and

communications

equipment

230.0

111%

277.1

84% Industrial equipment

102.6

103%

65.2

111% Subtotal

332.6

109%

342.3

88% Components

165.0

104%

208.6

100% Total

853.2 y

99%

902.2 y

89% * See Details of Product Categories below. ** See Notes to consolidated financial statements above.

Details of Product Categories Consumer Products Video and audio equipment: (video cassette recorders, video camcorders, TVs, TV/VCRcombination units, DVD players, satellite broadcast receivers,radios, radio/cassette stereos, portable headphone players, CDand MD players, stereo hi-fi equipment, electronic musicalinstruments, prerecorded video and audio tapes and discs, etc.) Home appliances and household equipment: (refrigerators, air conditioners, home laundry equipment,vacuum cleaners, microwave ovens, other cooking appliances,kitchen fixture systems, electric, gas and kerosene hot-watersupply systems, heating appliances, bath and sanitary equipment,electric lamps, cameras and flash units, bicycles, etc.) Industrial Products Information and communications equipment: (facsimiles, telephones, mobile communications equipment,personal computers, printers and peripherals, copiers, CRT andLCD displays, hard disk drives, CD-ROM, DVD-ROM/RAM and otheroptical disk drives, CATV systems, AV systems for commercial andindustrial use, communication network equipment, etc.) Industrial equipment: (electronic-parts-mounting machines, industrial robots,welding machines, air-conditioning equipment, vending machines,electronic measuring instruments, medical equipment, car audioand car navigation equipment, etc.) Components (semiconductors, cathode-ray tubes, printed circuit boards,PDP and LCD devices, tuners, capacitors, other generalcomponents, speakers, electric motors, compressors, drybatteries, storage batteries, etc.) ots Original Text Service:Matsushita Electric Industrial Co., Ltd. Internet:http://www.newsaktuell.de Contact: Mr. Akihiro Takei ofPanasonic Finance, America, Inc. (USA) 212-371-5447

Subscribers please note that material bearing the slug"PROTEXT" is not part of CTK's news service and is not to bepublished under the "CTK" slug. Protext is a commercial serviceproviding distribution of press releases from clients, who areidentified in the text of Protext reports and who bear fullresponsibility for their contents.

PROTEXT