TOKYO (Reuters) - Panasonic Corp raised its full-year operating profit outlook by 13 percent and returned to a net cash positive position for the first time in five years after a drastic restructuring chopped unprofitable product lines in smartphones, plasma TVs and semiconductor chips.
Panasonic said on Friday it expected a 350 billion yen ($3.15 billion) operating profit for the year to next March, compared with its prior estimate of 310 billion yen issued in July. The new figure would mark a 15 percent rise from last year and exceeds the average estimate of 339.06 billion yen by 20 analysts according to Thomson Reuters StarMine.
The Japanese electronics maker also logged a 15 percent rise in operating profit for the July-September quarter to 94.7 billion yen.
Panasonic is targeting growth in businesses supplying industrial customers, especially in the auto sector, after racking up huge losses on its consumer electronics business in recent years as it faced stiff competition from Asian rivals.
It has steadily pulled the plug on unprofitable operations, however, and at a strategy briefing in March said it planned to double sales to the auto sector and boost revenue in its housing business by 50 percent by the 2018/19 financial year.
It is also aiming for a record 10 trillion yen in revenue in 2018/19, with 2 trillion yen coming from the automotive business. It is targeting 7.75 trillion yen in total revenue for the current year.
Chief Executive Kazuhiro Tsuga told an earnings briefing that Panasonic would not be able to achieve the revenue target through organic growth alone and that it would need to find a partner to break into the first tier of global automotive suppliers.
“We have to choose a partner very carefully,” he said. “If we don’t have a partner I think it will be hard to get into Tier 1.”
Panasonic acquired 49 percent of Spanish auto safety system maker Ficosa International [FICOS.UL] last month for $275 million.
Profit in its auto segment, which supplies lithium-ion batteries to U.S.-based electric car maker Tesla Motors Inc, climbed 31 percent in the latest quarter. Panasonic has said it would provide hundreds of millions of dollars for Tesla’s new battery factory in the United States.
Chief Financial Officer Hideaki Kawai credited the weaker yen with helping the company become net cash positive a year and a half ahead of its March 2016 target. The company’s consolidated foreign exchange rate for the latest quarter was 104 yen per dollar, compared with 99 yen a year earlier.
Reporting by Sophie Knight; Editing by Edmund Klamann