Panasonic Corp. on Tuesday raised its earnings forecasts for the current year through March, projecting a net profit of ¥150 billion ($1.4 billion), helped by stronger-than-expected sales in home appliances and a pickup in demand for automotive equipment.
The figure, revised upward from the company’s earlier estimate of ¥100 billion in net profit, would still mean a 33.5% drop from a year earlier.
Sales are now expected to drop 11.9% to ¥6.6 trillion, up from the ¥6.5 trillion previously forecast, while operating profit will likely decrease 21.7% to ¥230 billion, revised upward from ¥150 billion.
Despite the negative impact of the coronavirus pandemic, Panasonic has more upbeat views on its segments dealing with home appliances such as refrigerators and air conditioners, automotive equipment and industrial solutions.
“People apparently want household items with more value added because they spend more time at home amid the pandemic and care about things that they didn’t before,” Chief Financial Officer Hirokazu Umeda said during an online news briefing.
“Between October and December, economic activity was stable and demand was strong from the auto industry, which sought to recover after production was suspended in the first quarter. That’s why we decided to revise upward the outlook,” Umeda said.
The business outlook for the connected solutions segment handling electronic devices for aircraft was cut by ¥80 billion, as the airline industry continues to see slumping travel demand due to the COVID-19 crisis.
For the April-December period, the Osaka-based firm’s net profit slipped 26.9% from a year before to ¥130.14 billion, due to the lingering impact of the sluggish automotive segment, which was hit by factory shutdowns earlier in the business year. Slumping sales in aviation electronics also weighed on the figure.
Operating profit shrank 5.8% to ¥226.80 billion after sales fell 15.3% to ¥4.87 trillion.
Panasonic has been streamlining its business portfolios to improve its profitability and is ramping up the output capacity of batteries for U.S. electric vehicle maker Tesla Inc., which has enjoyed strong sales.
Panasonic said Monday it will end solar cell production at its factories in Malaysia and Japan by the close of the next fiscal year to March 2022, withdrawing from the business.
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