Denso raises profit forecast on global auto rebound

TOKYO, July 30 (Reuters) - Denso Corp (6902.T), Japan's largest car parts maker, raised its full-year profit forecast to above market expectations after swinging back to profit in the latest quarter due to a rebound in global auto production.

Like other Japanese car and car parts makers, Denso's earnings have been boosted by Japanese government subsidies for eco-friendly cars. That scheme is set to end in September, potentially leading to a drop-off in demand.

For the three months ended in June, Denso reported an operating profit of 70.7 billion yen, against a loss of 15.2 billion yen in the same quarter last year. Sales jumped 37 percent to 802.8 billion yen.

"Despite a currency exchange loss, the sales and operating income increased due to the recovery of worldwide car production from last year" Sadahiro Usui, managing officer of Denso Corporation, said in a statement.

The company raised its outlook for the full year to March 2011 by 28 percent to 177 billion yen, above the market consensus of 168.6 billion yen in a poll of 15 analysts by Thomson Reuters I/B/E/S.

Shares of Denso were down 2.5 percent at 2,489 yen, underperforming a 1.8 percent fall in the benchmark Nikkei average .N225. (Reporting by Benjamin Shatil)