Panasonic Forecasts Sharp 2016 Profit Slide on New Spending

  • Profit to fall 8.5 percent next fiscal year to 375 billion yen
  • Operating income will rebound to 500 billion yen in FY2018

Panasonic Corp. forecast an 8.5 percent fall in profit next fiscal year on increased spending but said operating income should rebound to its highest in more than a decade by fiscal 2018.

Operating income will probably decline to 375 billion yen ($3.3 billion) in the year ending March 2017 as it invests in its automotive, housing and appliances businesses, the Japanese company said in a statement Thursday. It will climb to 500 billion yen in three years, it said.

President Kazuhiro Tsuga is steering 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 in December agreed to pay 186.6 billion yen for U.S.-based maker of refrigeration systems Hussmann to bolster its housing operations. That was part of a push to spend 1 trillion yen to boost sales.

“We are looking at many possible areas of growth and opportunities for acquisitions,” Tsuga said at a news briefing. “We will continue to adjust the targets as we implement the growth strategy.”

Tsuga said the company may miss its target of 10 trillion yen in sales by fiscal 2018, after lowering the outlook for the current year because of a cooling Chinese economy.

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