By Ko Terada / Yomiuri Shimbun Staff Writer
Japanese conglomerate Panasonic Holdings Corp. expects its consolidated net profit to increase 120% year-on-year, propelling the figure to 420 billion yen in the fiscal year ending March 2027, according to the company's earnings forecast.
If the forecast holds, the company will near the record high it achieved in the fiscal year ended March 2024, when its net profit was 443.9 billion yen.
The company aims to escape its doldrums through structural reforms centering on a workforce reduction of around 12,000 employees, as well as by capitalizing on robust demand for artificial intelligence.
In February 2025, Panasonic classified those of its businesses with a poor outlook as "challenged businesses." This category includes its television, kitchen appliance and industrial equipment units. The company said it will begin structural reforms, and may shut down or divest such businesses.
In May 2025, the company announced workforce reductions. It initially planned to cut about 10,000 jobs, but the figure ballooned after the number of voluntary retirees exceeded expectations.
As part of its restructuring efforts, Panasonic has divested a housing equipment subsidiary to YKK Corp. It has also sold Ficosa International S.A., a major Spanish auto parts maker. On Tuesday, Panasonic announced that it will divest its units for auto motors and auto cooling fan motors to MinebeaMitsumi Inc., a precision parts manufacturer.
Panasonic forecasts a 30-billion-yen drop in profit this fiscal year because of the conflict in the Middle East and soaring prices for semiconductor memory. At the same time, the company expects that its profit will increase by 145 billion yen as a result of structural reforms.
Panasonic is experiencing strong demand for energy storage systems for AI data centers. Sales revenue for the business is expected to reach 550 billion yen, up 70% from the previous year. The company has set a target of increasing sales revenue in this area to 800 billion yen in the fiscal year ending March 2029, but now it expects to achieve this a year ahead of schedule.
By March 2029, Panasonic plans to invest 500 billion yen in the AI infrastructure sector, including energy storage systems, to expand production capacity in the field. The company aims to increase sales revenue from the sector to 1.4 trillion yen.
"We will transform our business model," said Yuki Kusumi, president and group CEO of the holding company, during an online press conference on Tuesday.
Meanwhile, Panasonic will continue its television and kitchen appliance businesses, where it will promote collaboration with other companies and shift development and production to China.
"Our home electronics sector plays an important role in driving the (Panasonic) brand," said Kusumi, stressing the company's need to continue the businesses.
However, the overall sales revenue of Panasonic Holdings is expected to drop 5.6% to 7.6 trillion yen this fiscal year, partly due to the sale of businesses. The challenge for the company lies in whether it can steadily execute its business strategy and translate it into growth.
On Tuesday, Panasonic also announced its consolidated financial results for the fiscal year ended March 2026. The company saw its sales revenue drop 4.8% from the previous year to 8.04 trillion yen, while net profit decreased 48.2% to 189.5 billion yen.
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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.
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May 13, 2026 08:28 ET (12:28 GMT)
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