Japan's Mitsubishi Electric Corp posted a better-than-expected 2 percent rise to a record quarterly operating profit on firm sales of factory equipment and power systems, but it kept its full-year outlook, which remains below market estimates.
Shares of Mitsubishi Electric climbed 3.4 percent to end at 1,102 yen on the news, compared with a 0.5 percent decline for the Tokyo bourse's electrical machinery index.
Low visibility is confounding Mitsubishi Electric, which along with US rival Rockwell Automation Inc and Germany's Siemens AG is trying to read demand for lasers, sensors robots and power systems amid projections for a global slowdown. "We are going to take each month at a time before we attempt to forecast beyond," said Senior Executive President Yukihiro Sato.
"In general, orders (for mechatronics) will likely weaken in the second half of the year," he said, adding that demand for machine tools and construction equipment would likely fall in October-March. For the year to March 2009, Mitsubishi Electric on Monday stood by its operating profit forecast of 268 billion yen ($2.5 billion), missing a market consensus of 276.7 billion yen from 14 analysts polled by Reuters Estimates.
Mitsubishi Electric is counting on demand from emerging markets to make up for rising raw materials prices and waning demand from factories that make US-bound products. Rising raw material costs would be a drag of about 36 billion yen on operating profit this year, up from 16 billion yen forecast at the beginning of the fiscal year, Sato said, adding that the company would continue to pursue cost cuts.
"The rag has been squeezed dry, but we're going to keep squeezing," Sato said. Mitsubishi Electric, which announced its withdrawal from mobile phones in March, is also seeking revenue boosts from its power generators, which it supplies to Mitsubishi Heavy Industries.
For April-June, Mitsubishi Electric earned an operating profit of 67.4 billion yen against 66 billion yen in the same period the previous year. That was higher than the quarterly estimates by analysts at Deutsche and at Mitsubishi UFJ Securities, which had both expected a slight profit fall.
Its net profit was 55.28 billion yen, up 18.8 percent from the year-ago period, on sales of 879.04 billion yen, up 0.7 percent and hitting a record quarterly high. Shares of Mitsubishi Electric have gained 24 percent since the start of the business year in April through Friday, outperforming a 8.6 percent rise in the Tokyo bourse's electrical machinery index.
Comments
Comments are closed.