Panasonic Profit Misses Analyst Estimates

Panasonic Corp., the supplier of batteries for electric-car maker Tesla Motors Inc., posted first-quarter profit that missed analyst estimates as fixed costs rose and consumer electronic demand in Japan weakened.

Net income fell 65 per cent to 37.9 billion yen ($368 million) in the three months ended June, Osaka-based Panasonic said in a statement Wednesday. That compares with the 49 billion-yen median estimate of three analysts surveyed by Bloomberg. The year-earlier result included one-time gains from changes to pension accounting.

President Kazuhiro Tsuga is focusing on selling to other businesses, including the supply of lithium-ion battery cells to Tesla, as he trims unprofitable electronics operations including televisions and chips. Panasonic boosted wages after cuts last year, increasing fixed costs at the automotive and industrial division. Separately, the company said it committed to working with Tesla on its battery Gigafactory project.

“TVs and semiconductor chips may continue to generate losses this fiscal year,” Masahiro Wakasugi, an analyst at BNP Paribas SA, said in a report before the announcement.

Panasonic said Wednesday demand in Japan for consumer electronics devices declined following a surge before an April tax increase.

Operating profit rose 28 per cent to 82.3 billion yen for the three months ended June, Panasonic said. That compares with the 67.8 billion-yen average of six analyst estimates compiled by Bloomberg.

Tesla Factory

 Panasonic will build cylindrical lithium-ion cells and invest in equipment, machinery and other tools, the company said Wednesday in a statement. Tesla will handle the land, building and utilities and use the cells to assemble battery packs.

Profit at the automotive and industrial systems unit, which supplies Tesla with battery cells, fell to 23.5 billion yen.

Tsuga suspended plasma panel production, trimmed smartphone and circuit-board operations and sold chip factories to Israel’s Tower Semiconductor Ltd. last year to focus on faster-growing businesses.

Panasonic has cut about 95,000 jobs since 2011, according to data compiled by Bloomberg.