© Reuters. FILE PHOTO: A logo of Panasonic Corp is pictured at the CEATEC JAPAN 2017 (Combined Exhibition of Advanced Technologies) at the Makuhari Messe in Chiba, Japan, October 2, 2017. REUTERS/Toru Hanai/File Photo
TOKYO (Reuters) – Japan’s Panasonic (OTC:) Holdings Corp lowered its annual operating profit forecast by 12.5% on Thursday, hit by headwinds from a slowing global economy and persistently high prices of raw materials.
The decline spells a challenge for the company in the face of a tricky outlook for global growth, as it builds out its energy business, as part of which it makes auto batteries for Tesla (NASDAQ:) Inc.
The industrial conglomerate slashed its operating profit forecast to 280 billion yen ($2.18 billion) for the financial year to Mar. 31, from 320 billion yen. That compares to an average forecast of 335.98 billion yen by 19 analysts surveyed by Refinitiv.
The company also saw a lower-than-expected third-quarter result, with its operating profit rising 16% to 84.4 billion yen. The result for the three months to Dec. 31 fell short of a mean estimate of 95.31 billion yen profit from nine analysts.
The energy business’s operating profit fell nearly half to 28.9 billion yen for the nine months through the end of December, hit mainly by high prices for raw materials and transport, despite a 25% rise is sales over the period.
(This story has been corrected to fix the name of the company from Panasonic Corp to Panasonic Holdings Corp in the opening paragraph)