(Bloomberg) -- Panasonic Corp. fell in Tokyo trading after reducing its full-year operating profit forecast by 21 percent as profitability in its solar panel and electronic components businesses declined and a stronger yen reduced income earned abroad.
The shares declined as much as 7.9 percent as of 9:06 a.m. on Tuesday, the biggest intraday slump in three months. Operating profit will probably reach 245 billion yen ($2.3 billion) in the fiscal period ending March, Panasonic said in a statement Monday. That's a 41 percent drop from a year earlier and short of the 326.5 billion yen average of 18 analyst estimates compiled by Bloomberg.
President Kazuhiro Tsuga has steered Panasonic away from consumer electronics to focus on housing, car information systems and the batteries it makes with Tesla Motors Inc. The Osaka-based company embarked on a spending spree, including an acquisition of U.S.-based maker of refrigeration systems Hussmann, to increase annual revenue to 10 trillion yen and operating profit to 500 billion yen. Slowing economic activity in China and the stronger yen are making those targets more difficult now.
“We believe the long-term story is intact as the company continues to be a key” supplier for Tesla, Atul Goyal, an analyst at Jefferies Group, wrote in a report. “This is more of a 2018-19 story.”
To contact the reporter on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net. To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Reed Stevenson, Edwin Chan
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