Panasonic gains on improved third-quarter performance
Signs hang above the Panasonic booth at a Consumer Electronics Show.

Shares of the Japanese electronic major Panasonic have climbed 17 percent in Tokyo after the company's third quarter results showed that it swung back to profits.

In the previous week, the company had posted a net income of 61.3bn yen ($666m; £421m) for the three months ending December, reversing the 197.6bn yen loss in the previous year.

The television maker retained its estimates for a full-year loss - about 765bn yen for the fiscal year ending March 2013 - but said that the recent slump of the yen against its peers helped improve business conditions. The local currency's weak run has boosted hopes of better corporate performance in the current quarter.

"For the time being they are being rescued by the weak yen and it looks like they may have a good fourth quarter as well," Yuuki Sakurai of Fukoku Capital Management told the BBC.

The recent political shift in Japan which brought the pro-stimulus Liberal Democratic Party in power had boosted hopes of economic recovery as it unleashed aggressive stimulus measures. This had weighed the local currency lower, pushing it over 15 percent lower against the dollar since November.

"The hope is that if the yen continues to remain weak then the losses could be less than what Panasonic had previously forecast," Sakurai added. A weak yen improves exporter's earnings and lowers the price of Japanese goods abroad.

The global slowdown that hurt demand and a decline in television prices had impacted Panasonic's performance in the recent months. It has also been hurt by the growing competition from South Korean counterparts such as Samsung.

Panasonic has confirmed in its latest report that the global consumer demand for flat panel televisions and digital devices has dropped further. The firm's overall sales declined eight percent on the year to 1.8tn yen in the previous quarter. Analysts are of the opinion that the company's over-reliance on the television business has been detrimental over the years and that it has to reconsider its strategies.

"People are still sceptical if the business model of Panasonic will be successful in the long run," said Sakurai.

"If the basis of a profit surge is just the weak currency, then than that is always going to be risky. For all you know, the yen could start to rise again and things may be back to square one for Panasonic."