Tokyo -- The world's largest manufacturer of consumer electronics, Panasonic Corp, said Friday that it was on the road to recovery and lowered its forecast net loss for the year.

The company forecast a net loss of 140 billion yen (1.54 billion dollars) for the year ending March 31 instead of the previous figure of 195 billion yen.

Panasonic forecast operating profits of 120 billion yen instead of 75 billion yen.

In the second quarter, Panasonic moved back into the black on the back of cost-cutting measures after losing money in the previous quarter.

The company made an operating profit of 49.1 billion yen in the second quarter in contrast to 118.6 billion yen in the same period the previous year.

Panasonic reported a net profit of 6.11 billion yen for the quarter, compared with 55.46 billion yen in the previous year.

Sales fell 21 per cent to 1.7 trillion. (dpa)