Panasonic, which had earlier said it expected to post a net profit of 50 billion yen in the fiscal year to March 2013, also cut its annual sales forecast to 7.3 trillion yen from 8.1 trillion yen.

Panasonic said its sales in the first half of the fiscal year tumbled amid slumping demand for its flat-panel TVs, digital cameras and mobile phones, as it booked a 685 billion yen loss for the six months to September.

Restructuring expenses alone in the current fiscal year would be about 440 billion yen, more than 10 times the firm’s original forecast.

“Despite signs of a moderate recovery, the global economy continues to contract with much deep remaining uncertainty due to the European financial crisis and slowdown of the Asian economic expansion including China,” Panasonic said in a statement.

“The electronics industry continued to be difficult with a downturn in digital products, especially flat-panel TVs, and a sales decline in electronic components,” it added.

Panasonic, like rivals Sony and Sharp which report earnings this week, has suffered in its television business amid falling prices and stiff competition from overseas rivals.

It accumulated debt from the purchase of smaller rival Sanyo.

Last month Moody’s cut its credit rating on Panasonic, citing the struggling firm’s weak profitability and high debt.

Panasonic has announced a major restructuring of its liquid crystal display manufacturing division, and is reportedly considering shifting all of its mobile phone handset production overseas because of high costs at home.

Domestic electronics and technology giants Toshiba and Fujitsu on Wednesday also both slashed their full-year profit forecasts.

TV and laptop computer maker Toshiba cut its net profit outlook to 110 billion yen from 135 billion yen for the year to March. IT and electronics giant Fujitsu said it lost 11.0 billion yen in the first half of the fiscal year and chopped its sales and profit outlook.

Japan’s electronics sector has been badly hit by the rise of the yen, which makes exporters’ products less competitive overseas, while falling prices and slow demand at home have also eaten into profits.

The yen hit a record high around 75 on the dollar late last year and remains strong.

Competitors including South Korea’s Samsung and US-based Apple are offering stiff competition, with high-resolution display technology a key battleground as demand intensifies for smartphones, tablet computers and other gadgets.

Manufacturers were also hit hard by last year’s quake-tsunami disasters, which paralysed operations and dampened consumer sentiment.