Panasonic net profit up, but firm forecasts falls

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TOKYO — Japanese electronics giant Panasonic reported a boost in yearly net profits on Thursday but offered a pessimistic forecast for the year ahead thanks to slower sales of industrial systems and reform costs.

The firm said annual net profit was up 20.4 percent on-year at 284.1 billion yen, with asset sales and a revision of its pension scheme compensating for falling profits in key segments.

Consolidated Financial Results and Supplemental Financial Data for fiscal 2019, the year ended March 31, 2019: https://t.co/7PVuvtnHSt

— Panasonic (@panasonic) May 9, 2019

But it forecast a 29.6-percent fall in net profit to 200 billion yen ($1.8 billion) for the year to March 2020.

Increased materials cost and restructuring expenses were already seen weighing on its earnings, the company said.

“Overall sales (are) expected to decrease due to sales decreases in industrial solutions along with factors such as the impact of business portfolio reform,” the firm said.

The company expects its annual operating profit to fall 27.1 percent to 300 million yen on expected sales of 7.9 trillion yen, down 1.3 percent.

The forecasts compared sharply with comparatively upbeat data from the just-finished fiscal year: an operating profit of 411.5 billion yen, up 8.1 percent, and sales of 8.0 trillion yen, up 0.3 percent.

Panasonic said it expected higher air conditioner sales in China as well as international sales of automobile batteries.

But restructuring costs, the slowing Chinese economy and increased fixed costs related to battery production would pressure profit, it added.