Panasonic Shares Jump Most in 11 Years on Restructuring Plans

(Bloomberg) — Shares of Panasonic Holdings Corp. soared 15% on its plans to overhaul personnel and trim underperforming businesses, part of a shift into high-margin areas like powering AI data centers.

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The Osaka-based company, whose sprawling operations include hairdryers, PCs and lithium-ion batteries used by the likes of Tesla Inc., will restructure low-growth businesses and make changes to its employment structure, according to a statement released Tuesday.

After Panasonic’s chief executive officer said that the company’s long-standing TV operations were under review, its stock climbed on Wednesday in their biggest intraday surge since February 2014.

“There may be other options besides a sale,” Yuki Kusumi told reporters after saying he couldn’t comment on whether the company would sell its TV business. “A part of me can’t help but get sentimental about our TVs.”

The company plans to boost its profit by more than ¥150 billion ($966 million) by March 2027 and add a further ¥150 billion by March 2029. Part of that push will involve consolidating the company’s many production, sales and logistics bases, Kusumi said, adding that executives were discussing how wide-ranging any personnel overhaul should be.

“Panasonic will be cutting headcount substantially and selling off multiple businesses while it is generating profits and cash flow for the first time in its history,” Citi analyst Kota Ezawa said in a note that categorized the restructuring “some drastic surgery.”

“We think the management team is fully ready and senses the urgency,” he said.

Kusumi has been pushing for greater changes at the company, which was founded in 1918. Panasonic will integrate artificial intelligence technology across its operations and team up with Anthropic to boost AI-related revenue, he said in a recent interview. One area that the company has been targeting is data centers’ growing need for high-efficiency and heat-resistant components and materials.

Once a global leader in consumer electronics, Panasonic is now a key battery supplier to Tesla. It’s seeking to expand in software, while fighting for relevance in appliances and industrial devices. In the December quarter, Panasonic reported a 4% rise in operating profit, helped by its lifestyle segment, which includes household appliances such as microwaves and vacuum cleaners, and its energy segment.

The maker of automotive-use batteries has been one of the beneficiaries of former US President Joe Biden’s Inflation Reduction Act, which provided tax credits to battery factories in the US. Panasonic, which makes batteries in Nevada with expansion plans in Kansas, doesn’t foresee a cancellation of those tax credits under President Donald Trump.

What Bloomberg Intelligence Says

Panasonic could grow profit on generative AI.

Panasonic could achieve its sales and operating profit targets for fiscal 2025 ending March. Operating profit in 4Q could remain high, after climbing 4% in 3Q. Its energy division operating profit could rise due to battery demand from data-center customers, while production efficiency can improve in its US factory. Industry-division profit could increase due to robust demand for electronic parts and materials for generative AI. Lifestyle-division profit could stabilize due to cost control, while Panasonic’s connect unit profit could also be stable due to cost-management capabilities, including Blue Yonder’s supply chain solutions.

-Masahiro Wakasugi, senior industry analyst

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–With assistance from Aya Wagatsuma.

(Updates with share reaction and analyst commentary)