Panasonic's losses reached 698 billion yen ($8.7 billion) for the fiscal second quarter as sales plunged in flat-panel TVs, laptops and other gadgets. The company plans to merge some of its subsidiaries.

The Osaka-based company revised its full year forecast from an earlier projection for a 50 billion yen ($625 million) profit to a massive annual loss of 765 billion yen ($9.6 billion).

Panasonic sank into a record loss of 772.2 billion yen ($9.6 billion) for the fiscal year through March 2012.

Panasonic's quarterly sales sank 12 percent to 1.82 trillion yen ($22.8 billion) mainly due to a global slowdown, the falling price of electronics products and competition from cheaper Asian makers.

Panasonic lowered its sales forecast for the full year through March 2013, to 7.3 trillion yen ($91.3 billion), down from an earlier 8.1 trillion yen ($101 billion).

Panasonic's restructuring expenses in the year ending in March may total 440 billion yen, Panasonic said, widening its earlier projection of 41 billion yen. That includes writedown of goodwill on businesses such as solar, lithium-ion batteries and mobile phones, it said.

Also Panasonic said it will boost the efficiency of its operations by merging three group companies focusing on mobile phones and network systems. As part of these moves, Panasonic will end its return to the European smartphone market by March 2013. Panasonic had released in OLED Eluga smartphone in Europe last April.

During the first fiscal half, Panasonic's sales grew in appliances (2%) and automotive systems (38%), but declined in TVs, digital cameras, Blu-ray recorders, mobile phones, printers and semiconductors, according to the company.