Panasonic Hit by Rising Prices of Uncooked Supplies, Element Scarcity; Posts Main Slide in Q3 Revenue

Japan’s Panasonic on Wednesday posted a larger-than-expected 44 p.c slide in third-quarter working revenue, hit onerous by rising prices for uncooked supplies, part shortages and a drop in home gross sales for home equipment.

Panasonic has sought to cut back its reliance on low-margin shopper electronics and home equipment, shifting its focus to automotive batteries for Tesla, manufacturing equipment, elements and extra not too long ago provide chain administration providers.

That stated, shopper and residential home equipment, which benefited from a stay-at-home gross sales growth throughout coronavirus lockdowns, nonetheless account for an enormous chunk of income.

Working revenue for the three months to December 31 dropped to JPY 73 billion (roughly Rs. 4,772 crore), far wanting a Refinitiv consensus estimate of JPY 107 billion (roughly Rs. 6,994 crore).

The economic conglomerate stated the revenue margin on the division which homes its shopper and residential home equipment companies was squeezed by rises in the price of iron, copper and different supplies.

Different divisions that had to deal with climbs in materials costs and part shortages, included its automotive enterprise, which makes sensors and different automotive elements, and its power enterprise, which has not too long ago benefited from rising battery gross sales to Tesla.

Its decade-old partnership with Tesla has been yielding a revenue since final yr as gross sales of electrical automobiles surged. Panasonic is ready to start supplying the US automaker with a brand new technology of batteries that can decrease EV manufacturing prices and will prolong automobile vary.

Third-quarter revenue was additionally weighed down by a revaluation of belongings and debt associated to its $7.1 billion (roughly Rs. 53,068 crore) buy final yr of Blue Yonder, a US firm that makes use of machine studying to assist firms join factories to warehouses and retailers. The quantity revalued was not disclosed.

Panasonic bought its stake in Tesla for about JPY 400 billion (roughly Rs. 26,149 crore) to assist fund that acquisition.

Panasonic caught with its full-year forecast for annual revenue of JPY 370 billion (roughly Rs. 24,188 crore) — a determine consistent with analysts’ forecasts.

© Thomson Reuters 2022

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