May 10, 2018 / 8:31 AM / 2 months ago

CORRECTED-UPDATE 1-Japan's Panasonic sees 12 pct profit increase, driven by EV battery sales

(Corrects year in first paragraph to 2019, not 2018)

* Automotive battery sales spur profit rise

* Forecast misses Y450 bln target set three years ago

TOKYO, May 10 (Reuters) - Japanese electronics conglomerate Panasonic Corp said on Thursday it expects operating profit to increase 11.7 percent in the year through March 2019 as sales of automotive batteries expand.

Panasonic has been shifting away from low-margin consumer electronics to products targeting corporate customers such as automotive cockpit systems and batteries.

Panasonic, the exclusive battery cell supplier for Tesla Inc’s mass-market Model 3 electric car, forecast profit of 425 billion yen ($3.87 billion), from 380.54 billion yen a year prior.

The outlook compared with the 429.76 billion yen average of 19 analyst estimates compiled by Thomson Reuters. It was below Panasonic’s 450 billion yen target set three years ago due to a stronger yen that eats into profit earned overseas.

Panasonic expects profit at its automotive energy business, which includes batteries, to more than double after production delays in the Model 3 pressured profit in the previous year.

Tesla earlier this month promised to meet its production target of 5,000 Model 3 cars per week by the end of June.

Mizuho Securities in a report this week estimated Panasonic’s battery sales to Tesla at around 100 billion to 110 billion yen for existing vehicles and several tens of billion yen for Model 3 cars built at Tesla’s so-called Gigafactory.

Panasonic sees batteries as central to its plan to nearly double automotive business revenue to 2.5 trillion yen by the year through March 2022.

To reduce the risk of over-relying on Tesla, Panasonic has also teamed up with Toyota Motor Corp to jointly develop batteries for electric vehicles.

($1 = 109.9500 yen)

Reporting by Makiko Yamazaki Editing by Christopher Cushing

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