By Reuters | Updated: July 31, 2024
TOKYO, July 31 (Reuters) – Panasonic Holdings (6752.T) said on Wednesday its first-quarter operating profit fell 7%, weighed by lower sales at its battery-making energy unit and an output drop at its automotive battery factory in Japan, but kept its profit outlook for the year.
Operating income for the key segment, which makes batteries for Tesla (TSLA.O) and other automakers, dropped 27% year-on-year to 21.6 billion yen ($141.97 million).
Overall operating profit declined 7% to 83.7 billion yen in the first quarter.
The energy unit reported extra costs related to building its automotive battery plant in the U.S. state of Kansas.
The weaker result is the latest indication of how slowing demand for electric vehicles has affected the earnings of automotive battery makers, particularly in the United States.
The EV outlook is the U.S. is also clouded by uncertainty ahead of the presidential election in November and the impact of future decisions made on the industry.
Panasonic Energy has sought to expand its business in the North American market, building its second U.S. plant in Kansas that is set to start production early next year, in addition to another in Nevada which provides batteries to Tesla.
The unit competes with other Asian battery manufacturers such as China’s CATL (300750.SZ) and South Korea’s LG Energy Solution (373220.KS) (LGES), which said last week its revenue would plunge more than 20% this year.
The company maintained its full-year operating profit forecast for the unit at 109 billion yen.
It also stuck to its full-year profit forecast for its entire business at 380 billion yen.
The company’s Panasonic Connect unit and Japan’s Orix said in statements they had entered into a capital partnership agreement for the transfer of Panasonic’s projector and display business.
The transfer price of the business, which will be carved out into a new company owned 80% by Orix and 20% by Panasonic Connect in April 2025, was 118.5 billion yen, Panasonic said.
($1 = 152.1400 yen)
@ Thomson Reuters 2024
