First-quarter Results

Consolidated group sales for the first quarter decreased 26% to 1,595.5 billion yen, from 2,152.0 billion yen in the same three-month period a year ago. Of the consolidated group total, domestic sales amounted to 858.8 billion yen, down 18% from 1,045.2 billion yen a year ago. Overseas sales decreased 33% to 736.7 billion yen, from 1,106.8 billion yen in the first quarter of the previous year.

In the electronics industry during the first quarter under review, despite visible sign of market stabilization, severe business conditions continued as the global recession and shrinking demand coincide with changes in the market structure including a demand shift to emerging markets and lower-priced products. Responding to these business conditions, Panasonic simultaneously rebuilds its management structure while preparing and taking action for future growth in fiscal 2010 as the final year of the GP3 plan.

Specifically, Panasonic implements drastic business structural reforms to rebuild its management structure. In addition, the company pursue penetration and internalization of "Itakona," acceleration of procurement cost reduction, reinforcement of comprehensive cost reduction efforts, and capital investment and inventory reductions. On the other hand, regarding preparations and actions for future growth, the company strengthens product competitiveness by creating products that are unique to Panasonic on the basis of "super link," "super energy saving" and "thorough universal design." Besides, the company continues to focus on the four major themes of the GP3 plan: double-digit growth in overseas sales, four strategic businesses, manufacturing innovation and the 'eco ideas' strategy.

Regarding earnings, operating loss1 for the first quarter was 20.2 billion yen, down from operating profit of 109.6 billion yen in the same period a year ago. This result was due mainly to the effect of a sharp sales decrease and price decline, although the company implemented thorough streamlining of material cost and fixed cost reduction. In other income (deductions), the company incurred 21.6 billion yen as expenses associated with the implementation of early retirement programs. As a result of these and other factors, the company incurred a pre-tax loss of 51.8 billion yen. Accordingly, net income attributable to Panasonic Corporation turned to a loss of 53.0 billion yen.

1 For information about operating profit (loss), see Note 2 of the Notes to consolidated financial statements.

Consolidated Sales Breakdown by Product Category

The company's first quarter consolidated sales by product category, as compared with prior year amounts, are summarized as follows:

Digital AVC Networks

Digital AVC Networks sales decreased 25% to 730.9 billion yen, from 975.5 billion yen in the same period of the previous year. Sales of video and audio equipment decreased 23% from the previous year, due mainly to sluggish sales in flat-panel TVs and digital cameras. In information and communications equipment, weak sales of notebook PCs and automotive electronics led to a 27% decrease overall from a year ago.

Home Appliances

Sales of Home Appliances decreased 19% to 279.0 billion yen, compared with 342.7 billion yen in the previous year, due mainly to a sales decline of air conditioners and compressors, despite favorable sales in refrigerators.

PEW and PanaHome

Sales of PEW and PanaHome decreased 20% to 313.2 billion yen, from 389.2 billion yen a year ago. Regarding Panasonic Electric Works Co., Ltd. (PEW) and its subsidiaries, sales decreased mainly in electrical construction materials and building products. For PanaHome Corporation and its subsidiaries, a deterioration of housing market conditions led to a decrease in sales.

Components and Devices

Sales of Components and Devices were also down 32% to 182.3 billion yen, compared with 269.3 billion yen in the previous year, due mainly to a sales downturn of semiconductors and general electronic components.

Other

Sales of Other totaled 90.1 billion yen, down 49% from 175.3 billion yen in the same period a year ago, due mainly to significantly weak sales in factory automation equipment.

Consolidated Financial Condition

Net cash provided by operating activities for the first quarter amounted to 70.0 billion yen. This was attributable primarily to depreciation and an increase in trade payables, despite a net loss and an increase in trade receivables. Net cash used in investing activities amounted to 83.3 billion yen. This was due primarily to capital expenditures for tangible fixed assets mainly consisting of manufacturing facilities such as flat-panel TVs and batteries, which are the company's priority business areas. Net cash provided by financing activities was 81.4 billion yen, due mainly to an increase in short-term debt by issuing short-term bonds. All these activities associated with the effect of exchange rate fluctuations, resulted in cash and cash equivalents of 1,041.1 billion yen as of June 30, 2009, up 67.3 billion yen, compared with the end of the last fiscal year (March 31, 2009).

The company's consolidated total assets as of June 30, 2009 increased 206.9 billion yen to 6,610.2 billion yen, compared with 6,403.3 billion yen at the end of the last fiscal year. This was due mainly to increases in cash and cash equivalents by issuing short-term bonds, an increase in inventories by seasonable influence, and increase of investments and advances affected by increase of market value in investments. Stockholders' equity decreased 37.7 billion yen, compared with the end of the last fiscal year, to 2,746.3 billion yen as of June 30, 2009. This result was due primarily to a decrease in retained earnings.

Outlook for Fiscal 2010

The global economy seems to stabilize, recovering from the worst of recession due primarily to economic stimulus measures in each country. Panasonic, however, expects that the outlook for global economy will continuously be uncertain for this second quarter onward. Although the ever-intensified price competition will continue, the company expects an overall sales increase due mainly to the market recovery of general electronic components and effects of economic stimulus measures. The company also anticipates a profit increase by implementing thorough reduction of fixed and material costs, and favorable foreign exchange rate. Regarding consolidated results forecast for six months ending September 30, 2009, the company revised its previous sales forecast of 3,260 billion yen upward to 3,300 billion yen. Operating loss is expected to be 20 billion yen, an improvement of 85 billion yen compared to the previous forecast of 105 billion yen. Loss before income taxes is forecast to be 90 billion yen, improved from the previously announced 195 billion yen. Net loss attributable to Panasonic Corporation is now expected to be improved from the previous forecast of 195 billion yen to 100 billion yen. Net loss attributable to Panasonic Corporation common shareholders, per common share is anticipated to be 48.29 yen, improved from the previous forecast of 94.17 yen. The business performance outlook for fiscal 2010 remains unchanged since previously announced on May 15, 2009.

Panasonic Corporation is one of the world's leading manufacturers of electronic and electric products for consumer, business and industrial use. Panasonic's shares are listed on the Tokyo, Osaka, Nagoya and New York stock exchanges.

For more information, please visit the following web sites:

Panasonic home page URL: http://panasonic.net/

Panasonic IR web site URL: http://panasonic.net/ir/

Disclaimer Regarding Forward-Looking Statements

This press release includes forward-looking statements (within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934) about Panasonic and its Group companies (the Panasonic Group). To the extent that statements in this press release do not relate to historical or current facts, they constitute forward-looking statements. These forward-looking statements are based on the current assumptions and beliefs of the Panasonic Group in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause the Panasonic Group's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. Panasonic undertakes no obligation to publicly update any forward-looking statements after the date of this press release. Investors are advised to consult any further disclosures by Panasonic in its subsequent filings with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.

The risks, uncertainties and other factors referred to above include, but are not limited to, economic conditions, particularly consumer spending and corporate capital expenditures in the United States, Europe, Japan, China and other Asian countries; volatility in demand for electronic equipment and components from business and industrial customers, as well as consumers in many product and geographical markets; currency rate fluctuations, notably between the yen, the U.S. dollar, the euro, the Chinese yuan, Asian currencies and other currencies in which the Panasonic Group operates businesses, or in which assets and liabilities of the Panasonic Group are denominated; the possibility of the Panasonic Group incurring additional costs of raising funds, because of changes in the fund raising environment; the ability of the Panasonic Group to respond to rapid technological changes and changing consumer preferences with timely and cost-effective introductions of new products in markets that are highly competitive in terms of both price and technology; the possibility of not achieving expected results on the alliances or mergers and acquisitions; the ability of the Panasonic Group to achieve its business objectives through joint ventures and other collaborative agreements with other companies; the ability of the Panasonic Group to maintain competitive strength in many product and geographical areas; the possibility of incurring expenses resulting from any defects in products or services of the Panasonic Group; the possibility that the Panasonic Group may face intellectual property infringement claims by third parties; current and potential, direct and indirect restrictions imposed by other countries over trade, manufacturing, labor and operations; fluctuations in market prices of securities and other assets in which the Panasonic Group has holdings or changes in valuation of long-lived assets, including property, plant and equipment and goodwill, deferred tax assets and uncertain tax positions; future changes or revisions to accounting policies or accounting rules; as well as natural disasters including earthquakes, prevalence of infectious diseases throughout the world and other events that may negatively impact business activities of the Panasonic Group. The factors listed above are not all-inclusive and further information is contained in Panasonic's latest annual report on Form 20-F, which is on file with the U.S. Securities and Exchange Commission.

(Financial Tables and Additional Information Attached)

                                                                                                  Panasonic Corporation                                                                           Consolidated Statement of Operations *                                                          (Three months ended June 30)                                                                                                                                                                                                              Yen (millions)                    Percentage                                                    2009             2008             2009/2008           Net sales                                 ? 1,595,458      ? 2,151,997      74  %               Cost of sales                             (1,170,871   )   (1,525,850   )                       Selling, general and                                                                            administrative expenses                   (444,770     )   (516,574     )                       Interest income                           2,913            7,198                                Dividend income                           3,417            5,343                                Interest expense                          (6,045       )   (5,756       )                       Expenses associated with                                                                        the implementation of                                                                           early retirement programs **              (21,586      )   (225         )                       Other income (deductions), net            (10,281      )   3,122                                Income (loss) before income taxes         (51,765      )   119,255          --                  Provision for income taxes                (7,752       )   (42,412      )                       Equity in earnings (losses) of                                                                  associated companies                      (1,839       )   337                                  Net income (loss)                         (61,356      )   77,180           --                  Less: Net income (loss) attributable to                                                         noncontrolling interests                  (8,379       )   4,149                                Net income (loss) attributable to                                                               Panasonic Corporation                     ? (52,977    )   ? 73,031         --                  Net income (loss) attributable to                                                               Panasonic Corporation                                                                           common shareholders, basic                                                                      per common share                          (25.58) yen      34.83 yen                            per ADS                                   (25.58) yen      34.83 yen                            Net income (loss) attributable to                                                               Panasonic Corporation                                                                           common shareholders, diluted                                                                    per common share ***                      --               34.83 yen                            per ADS ***                               --               34.83 yen                                                                                                                            (Parentheses indicate expenses, deductions or losses.)                                                                                                                                          * ** *** See Notes to consolidated financial statements.                                                                                                                                                                                                                                        Supplementary Information                                                                       (Three months ended June 30)                                                                                                                                                                                                              Yen (millions)                                                                                  2009             2008                                 Depreciation (tangible assets)            ? 57,203         ? 81,111                             Capital investment ****                   ? 114,315        ? 102,682                            R&D expenditures                          ? 113,581        ? 131,074                                                                                                                            Number of employees (June 30)             288,933          310,581                                                                                                                              **** These figures are calculated on an accrual basis.