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Panasonic cuts profit outlook after weak third-quarter on slowing China demand

Monday 04 February 2019 10:04 AM


Japan’s Panasonic Corp reported a 19 percent drop in third-quarter operating profit and cut its full-year earnings outlook, citing slower demand for home appliances and factory automation equipment in China amid an escalating Sino-U.S. trade war.

The electronics company posted on Monday an operating profit of 97.6 billion yen ($889.05 million) for the October-December quarter, down from 120.1 billion yen a year ago. That was far below the average 122.35 billion yen estimate of eight analysts, according to Refinitiv data.

Panasonic cut its operating profit forecast for the year ending March to 385 billion yen from 425 billion yen. The outlook compared with the 420.25 billion yen average of 18 analyst estimates, according to Refinitiv data.
A bright spot in the otherwise bleak earnings is that Panasonic’s energy division, which includes the battery business with U.S. electric car maker Tesla Inc, posted an operating profit of 16.5 billion yen, its first profit in three quarters.

Panasonic, the exclusive battery cell supplier for Tesla’s current production models, saw its profits squeezed early last year by the U.S. EV maker’s initial production delays for the mass-market Model 3 sedan.