TOKYO, July 31 (Reuters) - Panasonic Holdings ( PCRFF )

said on Wednesday its first-quarter operating profit fell 7%,

weighed by lower sales at its battery-making energy unit and an

output drop at its automotive battery factory in Japan, but kept

its profit outlook for the year.

Operating income for the key segment, which makes batteries

for Tesla and other automakers, dropped 27%

year-on-year to 21.6 billion yen ($141.97 million).

Overall operating profit declined 7% to 83.7 billion yen in

the first quarter.

The energy unit reported extra costs related to building its

automotive battery plant in the U.S. state of Kansas.

The weaker result is the latest indication of how slowing

demand for electric vehicles has affected the earnings of

automotive battery makers, particularly in the United States.

The EV outlook is the U.S. is also clouded by

uncertainty ahead of the presidential election in November and

the impact of future decisions made on the industry.

Panasonic Energy has sought to expand its business in the

North American market, building its second U.S. plant in Kansas

that is set to start production early next year, in addition to

another in Nevada which provides batteries to Tesla.

The unit competes with other Asian battery manufacturers

such as China's CATL and South Korea's LG Energy

Solution (LGES), which said last week its revenue

would plunge more than 20% this year.

The company maintained its full-year operating profit

forecast for the unit at 109 billion yen.

It also stuck to its full-year profit forecast for its

entire business at 380 billion yen.

The company's Panasonic Connect unit and Japan's Orix said

in statements they had entered into a capital partnership

agreement for the transfer of Panasonic's ( PCRFF ) projector and display

business.

The transfer price of the business, which will be carved

out into a new company owned 80% by Orix and 20% by Panasonic

Connect in April 2025, was 118.5 billion yen, Panasonic ( PCRFF ) said.

($1 = 152.1400 yen)