Japanese electronics brand Panasonic reported an impressive 42 percent increase in first-quarter operating profit on Monday, thanks to a weaker yen and strong sales in its automotive and energy segments, which bolstered the company’s financial performance.
In the three months ending in June, Panasonic’s operating profit reached a substantial $637 million, closely aligning with analysts’ forecasts.
Notably, the battery unit demonstrated exceptional performance, with its first-quarter operating profit reaching $206 million, marking a remarkable increase of over 80 percent compared to the same period in the previous year.
Panasonic’s energy unit, responsible for manufacturing batteries for Tesla, emerged as a major driving force behind the remarkable profit surge during the quarter.
Furthermore, the battery unit benefited from the U.S. Inflation Reduction Act tax credits, contributing to an impressive 80 percent surge in non-adjusted operating profit compared to the previous year.
Panasonic maintains an optimistic overall outlook, as the company retained its full-year operating profit forecast at a robust $300 billion.
However, in the first quarter, Panasonic’s industry arm, focusing on electronics components and materials, recorded an 86.8 percent decline in operating profit, totaling $24 million, primarily due to challenging conditions in China.
The rapid shift to electric vehicles has intensified competition in China’s auto market. Group CFO Hirokazu Umeda stated that the industrial company faces increased competition in China’s largest auto market, not only due to the rapid adoption of electric vehicles but also because of an inventory build-up of locally-made gasoline automobiles.
Additionally, Panasonic acknowledged the absence of signs indicating a full-fledged recovery in China’s factory automation industry. Moreover, industries such as servers, data centers, and ICT are expected to take longer to recover overall.
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