Panasonic shares plunge after profit warning, Tesla’s Maxwell deal

Business

FILE PHOTO – A man is seen next to Panasonic Corp’s logo at Panasonic Center in Tokyo, Japan, February 2, 2017. REUTERS/Kim Kyung-Hoon/File Photo GLOBAL BUSINESS WEEK AHEAD

TOKYO (Reuters) – Shares of Panasonic Corp fell more than 6 percent on Tuesday after the Japanese electronics company reported disappointing quarterly results and cut its full-year outlook.

Potentially dealing an additional blow to Panasonic, Tesla Inc, its biggest battery client, agreed to buy energy storage company Maxwell Technologies Inc.

Industry analysts said the impact on Panasonic, for now the exclusive battery cell supplier for Tesla’s current production models, was unclear.

Most focused on the weaker outlook, which Panasonic blamed on a slowing Chinese economy hit by a trade war with the United States that hurt demand for auto components, air conditioners and factory equipment.

“The latest earnings have revealed how tough the situation is for Panasonic,” said Masahiko Ishino, an analyst at Tokai Tokyo Research Center.

The company has shifted away from low-margin consumer electronics to products targeting corporate customers such as automotive cockpit systems and batteries, but “it’s clear that the company is suffering in business-to-business areas as well,” Ishino said.

Reporting by Makiko Yamazaki; Editing by Subhranshu Sahu

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