Panasonic Corp saw a sharp plunge in its shares as investors reacted to a sharp downward revision of the electronics maker’s profit forecast. A result brought about by heavy spending to construct its automotive battery business.
Panasonic has been reinventing itself as a provider of auto parts, batteries and energy-saving home systems to escape the price competition of smartphones and lower-margin consumer products.
But its profit revision shows the company is far from producing from what it considers its next profit drivers, analysts have stated. An upfront investment in a battery division is mostly to cause Panasonic’s battery division to enter an operating loss in the current year, the company stated in its statement this week.
Panasonic shares were down-traded briefly during the trading session due to an excess of sell orders before slumping as much as 8 percent. In contrast, the broader TOPIX stock price index almost flattened out.
The Japanese firm on Monday lowered its operating profit forecast for the full year ending March 31 to 245 billion yen ($2.34 billion). That compared with its previous projection of 310 billion yen and an average estimate of 297.30 billion yen drawn from analysts.
The company cited a strengthening yen as well as upfront investment in a battery factory for U.S. electric vehicle maker Tesla Motors Inc.
