Japan Denso raises profit outlook, sees yen boost for cars, suppliers
TOKYO Feb 1 (Reuters) - The world's second-biggest auto parts supplier Denso Corp raised its annual profit forecast by 6.7 percent to 240 billion yen ($2.6 billion) on Friday, helped by a weakening yen that also benefits its Japanese customers including Toyota Motor Corp.
Denso, whose results serve as performance indicators for automakers, posted an operating profit of 51.7 billion yen for the October-December quarter, up 3 percent from a year ago and in line with forecasts.
"Considering the progress of the depreciation of yen, we have revised the assumed exchange rate and have made an upward revision to the year-end sales forecasts," Kenichiro Ito, an executive director of Denso, said in a statement.
Denso shares, which have risen nearly 52 percent since mid-November, were trading around 3 percent up by 0417 GMT, outperforming a 0.7 rise in the broader Nikkei index.
The yen weakened about 11 percent versus the dollar between October and December. Denso changed its average dollar rate assumption for the business year to March to 81 yen from 80 yen, and its euro rate to 105 yen from 100 yen.
Denso, 22.5 percent-owned by Toyota, said strong car sales in North America helped boost profits.
Japan's top three carmakers Toyota, Nissan Motor Co and Honda Motor Co are expected to benefit from the yen's depreciation, though Honda's trimming of its net profit forecast on Thursday suggested this may take some time to come into full effect.
As a result of the currency move, Denso and other parts makers are likely to face less pressure from Japanese automakers to cut prices.
Denso's main rival Robert Bosch of Germany, the world's biggest auto parts supplier, last year sold its 5 percent stake in the Japanese firm for around 1.1 billion euros.
- Exclusive: Angry with Washington, 1 in 4 Americans open to secession
- Scots spurn independence in historic vote, devolution battle begins |
- Alibaba surges 38 percent on massive demand in market debut |
- Eight bodies found after attack on Guinea Ebola education team
- French jets strike in Iraq, expanding U.S.-led campaign against Islamic State |