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Revamp efforts keep generating profit for Panasonic

July 31, 2014

Panasonic Corp. kept logging an operating profit growth in the April-June quarter, helped by its restructuring efforts to shift its focus to industrial markets from less profitable consumer products.

The Japanese electronics conglomerate said its group operating profit rose 28.2 percent to 82.29 billion yen in the first quarter of fiscal 2014 from a year earlier, driven by industrial products such as automotive parts and housing-related fixtures.

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

Panasonic's first-quarter net profit fell 64.8 percent to 37.93 billion yen, however, in reaction to the jump in profit a year before due to a one-off gain related to its pension program as well as reduced personnel costs. Sales grew 1.5 percent to 1.85 trillion yen.

The company had expected demand for home appliances to weaken in the current fiscal year, given the consumption tax hike in April.

But it said a decline in demand following the front-loaded increase ahead of the tax rise was not as sharp as it feared. Robust sales of air conditioners in Japan and China particularly helped boost profit in the April-June period.

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

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Source: Japan Economic Newswire

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