Panasonic posts Q2 profit drop

Panasonic Corporation reported a 12% drop in its second-quarter operating profit, hurt by the ongoing Sino-US trade war and its battery business with Tesla Inc staying in the red.

Still, the Japanese electronics company’s September-quarter earnings of 83.9 billion yen ($772.06 million) was 33% higher than analysts’ average estimate polled by Refinitiv, thanks to its housing and home appliances businesses posting solid profits.

A year earlier, Panasonic, the exclusive battery cell supplier for new electric vehicles (EVs) made by Tesla, had earned 95.2 billion yen. “We are quickly ramping up battery production (at the Gigafactory joint venture with Tesla), but improvements in production efficiency have been delayed,” Chief Financial Officer Hirokazu Umeda said at an earnings briefing.

But Umeda said the joint venture is still aiming to make start making profits at least on a monthly basis, by the end of the financial year on March 31. “Tesla posted profits in the latest earnings and that’s positive for us.”

The US electric carmaker surprised investors last week with a quarterly profit that sent its shares soaring. Panasonic’s automotive business, which includes car batteries, recorded an operating loss of 12.7 billion yen compared with a 7.1 billion yen loss in the year-ago quarter.

The company maintained its profit forecast for the year through March at 300 billion yen, compared with an average estimate of 293.94 billion yen from 19 analysts.

Panasonic has turned its focus away from low-margin consumer electronics and bet on businesses that sell to automakers as well as to corporations such as factory-owners and firms that automate processes.

Reuters