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Panasonic second quarter profit down 15 percent as investment in Tesla batteries weigh

Panasonic second quarter profit down 15 percent as investment in Tesla batteries weigh
FILE PHOTO - Panasonic's logo is seen on a wall of an electronic shop in Tokyo February 3, 2012. REUTERS/Kim Kyung-Hoon/File Photo   -   Copyright  Kim Kyung Hoon(Reuters)
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TOKYO (Reuters) – Japan’s Panasonic Corp on Wednesday reported a 15 percent fall in second-quarter operating profit, missing analyst estimates, weighed down by investment in Tesla Inc’s battery plant in Nevada.

Panasonic, the exclusive battery cell supplier for new electric vehicles (EVs) made by Tesla, posted profit of 95.2 billion yen ($840.92 million) for the July-September period, versus 112.7 billion yen a year prior.

The result compared with the 112.60 billion yen average of 7 analyst estimates compiled by Refinitiv.

Panasonic’s factory automation business also slowed as an escalating Sino-U.S. trade war made global manufacturers cautious about making fresh investment on equipment.

Panasonic maintained its profit forecast for the year through March at 425 billion yen, versus a 432.51 billion yen estimate from 20 analysts.

Panasonic has been investing in Tesla’s battery plant as production of mass-market Model 3 cars accelerates. Its $1.6 billion investment to take production capacity to 35 gigawatt hours (GWh) is almost complete, but the business has yet contribute to profit.

Tesla last week reported a net profit, positive cash flow and wider-than-expected margins for the quarter.

While still below Tesla’s production target set for June of 5,000 Model 3s per week, the roughly 4,300 Model 3s the automaker is now averaging was enough to boost earnings.

The Model 3 was the best-selling car in the U.S. market in terms of revenue and fifth best-selling car in terms of volume in the July-September quarter, Tesla said.

($1 = 113.2100 yen)

(Reporting by Makiko Yamazaki; Editing by Christopher Cushing)

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