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Investing.com -- Panasonic (OTC:PCRFY) reported June-quarter adjusted operating profit of ¥91.5 billion, falling short of the ¥100.0 billion forecast, primarily due to differences in eliminations and adjustments.
The Japanese electronics giant saw automotive battery sales volume from its North American factories reach 10.1GWh, representing a 16% year-over-year increase and a 1% quarter-over-quarter gain. Sales of datacenter battery backup units (BBUs) doubled, while Industry segment product sales for generative AI servers grew approximately 40% compared to the same period last year. U.S. tariffs reduced profits by ¥5.8 billion during the quarter.
Despite the mixed results, Panasonic maintained its fiscal year 2026 targets of ¥500 billion in adjusted operating profit and ¥370 billion in operating profit. The company has adjusted its forecast components after dissolving an agreement to transfer its projector business to Orix (NYSE:IX), which cut expected share transfer gains by ¥50 billion. This reduction was offset by adding ¥50 billion to its forecast for other earnings in Other/Eliminations and adjustments.
In its Energy segment, Panasonic acknowledged that automotive battery production at North American factories will fall below its initial 46GWh projection due to slowing electric vehicle demand, though it still expects positive year-over-year growth. The company also anticipates stronger demand for datacenter BBUs than initially forecasted.
Regarding U.S. tariff effects, Panasonic noted these are not included in its forecasts, but their quantitative impact is trending lower than initially expected, representing less than 1% of consolidated sales.
Morgan Stanley (NYSE:MS) commented: "Despite prospects of an undershoot in automotive battery business and an overshoot in data center BBUs in the Energy segment, Panasonic maintains its existing earnings forecasts as it has not reached the point of undertaking a definitive review. With uncertainty persisting for automotive battery business, we think the shares will react negatively."
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