Panasonic raises profit outlook by 12% on share capital gain

TOKYO, Oct. 28 (Reuters) – Japan’s Panasonic Corp (6752.T) on Thursday raised its full-year operating profit outlook by 12% on Thursday, helped by a gain in the share’s valuation and demand for automotive batteries and factory automation equipment.

Panasonic has raised its profit forecast for the year as of March 31 to 370 billion yen ($ 3.25 billion) from 330 billion yen. The forecast is above an average profit of 368.1 billion yen based on forecasts from 20 analysts, according to data from Refinitiv.

This improved outlook was largely the result of a 58.3 billion yen gain in the value of the company’s 20% stake in Blue Yonder after buying the rest of the US software company for $ 7. $ 1 billion in September.

This acquisition is part of a strategy to move away from low-margin consumer electronics. The conglomerate is also expanding its automotive battery business and boosting sales of machines to manufacturing companies.

Panasonic sold its stake in Tesla Inc (TSLA.O) for around 400 billion yen to help fund the acquisition of Blue Yonder, which uses machine learning to help companies manage supply chains by connecting factories to warehouses and retailers.

A man is seen next to the Panasonic Corp logo at the Panasonic Center in Tokyo, Japan on February 2, 2017. REUTERS / Kim Kyung-Hoon

Despite the sale of Tesla shares, it is increasing sales of auto batteries to the US company as global demand for electric vehicles increases amid tighter carbon emission limits.

Panasonic unveiled a new large prototype battery on Monday that will help Tesla lower production costs. Tesla says the generator set will cut battery costs in half and help it grow battery production 100-fold by 2030.

For the three months ending September 30, Panasonic posted a profit of 96.8 billion yen, compared to a profit of 92.8 billion yen a year ago, worse than the estimated average profit of 105.9 billion. yen from nine analysts surveyed by Refinitiv.

Component supply disruptions and higher material costs in the aftermath of the pandemic have hurt the profits of some units, including home appliances. A semiconductor shortage that has forced automakers to cut production has also reduced sales of auto components, such as dashboard displays.

This chip shortage is expected to start to ease over the remainder of the year and improve thereafter, CFO Hirokazu Umeda said at a press briefing.

($ 1 = 113.7100 yen)

Reporting by Tim Kelly; Editing by Christian Schmollinger, Barbara Lewis, Gerry Doyle and Mike Harrison

Our Standards: The Thomson Reuters Trust Principles.

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