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Komatsu lifts outlook, outdoes rival Caterpillar
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TOKYO, July 30 (Reuters) - Komatsu Ltd. (6301.T), Japan's top construction machinery maker, lifted its full-year outlook above expectations as strong demand bumped up quarterly profit 65 percent, outshining arch-rival Caterpillar Inc. (CAT.N).
Heavy demand for earth-moving equipment in Asia, particularly in China, where Komatsu has a big presence, and in Europe, combined with a softer yen to offset a weak U.S. housing market, the company said.
It now expects net profit to come in at 198 billion yen ($1.7 billion) for the year to the end of March, 8 percent higher than its earlier estimate and 20 percent more than its previous year's result.
The upbeat projection beats a consensus of 191 billion yen
($1.6 billion) from 19 analysts polled by Reuters Estimates.
For the April-June first quarter, Komatsu booked a 65 percent jump in net income to a record 56.5 billion yen on a 26 percent climb in sales.
Boosted by surging demand in the mining industry and rapid growth in China and other developing parts of the world, Japan's makers of dump trucks, bulldozers and excavators are bullish about the future.
"In Europe, the CIS, Asia, Oceania, the Middle East and Africa, infrastructure and mining-related demand has led to a large jump in revenue from the previous year," it said in a statement.
Sales increased 66 percent in Europe and the CIS region during the quarter, while declining 7 percent in North America.
An increase in production capacity for its industrial machinery division also helped, as did a boost in sales in Latin America.
Hitachi Construction Machinery Co. Ltd. (6305.T) lifted its full-year profit forecast last week to 48 billion yen, up 12 percent from its previous estimate on healthy demand in Asia and Europe for excavators.
The strong performance by Japanese makers contrast with industry leader Caterpillar, whose quarterly earnings fell more than expected due to lower truck engine sales, weakness in the U.S. construction market and higher production costs.
Caterpillar, whose second-quarter net profit fell 21 percent, said production inefficiencies at its truck-engine operations played a big role in a jump in costs due to new clean-air rules.
Komatsu's shares rose 3.7 percent to 3,890 yen ahead of the earnings result on Monday compared to a 0.03 percent increase for the benchmark Nikkei 225 index .N225.
The stock has risen 61 percent for the year to date compared to a virtually flat Nikkei.
($1=118.38 Yen)
((Reporting by Taiga Uranaka, editing by Rodney Joyce, Reuters Messaging: taiga.uranaka.reuters.com@reuters.net; +81-3-3432-8231, taiga.uranaka@reuters.com))
($1=118.38 Yen) Keywords: KOMATSU RESULTS/
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