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Panasonic’s revamp efforts continue to pay dividends

Kyodo

Panasonic Corp. said Thursday that its operating profit grew in the April-June quarter on the back of efforts to restructure by shifting focus to industrial markets instead of less profitable consumer products.

The electronics giant said group operating profit rose 28.2 percent to ¥82.29 billion in the first quarter of business 2014 compared with the previous year, driven by such products as auto parts and housing fixtures.

Also on Thursday, Panasonic said it agreed with Tesla Motors Inc. to cooperate in building a large lithium-ion battery plant in the United States. Panasonic will provide battery cells to the electric carmaker while investing in other machinery. It did not reveal how much it will invest.

Panasonic’s first-quarter net profit fell 64.8 percent to ¥37.93 billion, however, in reaction to the profit jump logged the year before on a one-off gain related to its pension program and reduced personnel costs. Sales meanwhile grew 1.5 percent to ¥1.85 trillion.

The company expected demand for home appliances to weaken in this year, given the consumption tax hike in April. But it said the decline in demand after the front-loaded jump ahead of the tax hike was not as sharp as feared. Robust sales of air conditioners in Japan and China gave a significant boost profit in the quarter.

For the full year through next March, Panasonic kept its forecast unchanged, projecting ¥310 billion in operating profit, up 1.6 percent from the previous year, ¥140 billion in net profit, up 16.2 percent, and ¥7.75 trillion in sales, up 0.2 percent.