Panasonic’s profit hit by China lockdowns

Japan's Panasonic Holdings Corp, which supplies batteries to Tesla, posted a 39 per cent drop in first-quarter earnings on Thursday as China's Covid-19 lockdowns and rising material costs disrupted production and squeezed profitability.

A two-month lockdown in Shanghai this spring kept people at home and forced factories to curtail output, exacerbating shortages of components including semiconductors. At the same time, rising material costs caused by Russia's invasion of Ukraine have eroded profits.

The Japanese conglomerate, however, stuck with its full-year operating profit forecast of 360 billion yen ($2.66 billion) for the year to March 31 as it bets that it can boost earnings by increasing prices on some products and cutting costs. That outlook is lower than an average profit estimate of 412 billion yen from 19 analysts, according to Refinitiv.