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Denso cuts annual operating profit forecast by 3.1%
TOKYO (Reuters) – Japan’s Denso Corp, a top Toyota supplier, cut its full-year operating profit forecast by 3.1% on Wednesday after reporting a first-quarter profit that was broadly in line with analysts’ expectations.
The company cut its operating profit forecast for the fiscal year ended March 31 to 692 billion yen ($4.53 billion) from 714 billion yen, missing the average estimate of 709.9 billion yen, according to 17 analysts surveyed by LSEG.
The cut reflected only Denso’s first-quarter result, which was lower than the company expected, it said in a statement. It maintained its forecast for the rest of the financial year.
The world’s second-largest auto components maker said operating profit rose 28 percent to 120.6 billion yen in the April-June period, beating the average estimate of seven analysts of 117.3 billion yen.
A year earlier, the company had made 94.4 billion yen in profit.
Denso gets more than half of its revenue from the Toyota group, including truck unit Hino Motors and small car maker Daihatsu.
The company said its operating profit rose in the quarter due to foreign exchange gains and efforts to boost its profitability, although production volumes fell amid weak vehicle sales in Asia.
Denso said last month it had divested stakes in several Toyota-affiliated companies after promising in April to sell all its cross-holdings in a bid to fund acquisitions and other investments.
Its shares were volatile, selling off sharply before recovering to end the morning session 1.4% higher. ($1 = 152.6500 yen)
(Reporting by Daniel Leussink; Editing by Shri Navaratnam and Savio D’Souza)