Some electronic part manufacturers have a hard time.
Several major Japanese electronic part manufacturers recorded a declined net result during 3 months to December 2015, compared to the same period of the previous year. Sales of automobile and medical instrument parts continued to grow during the period, while sales of smartphone parts and optronics related parts (such as polarization plates for liquid clystal) were lower than expected. Nitto Denko’s net profit declined 8% to JPY 24.2 billion, partly affected by the production adjustment made by its major customer, Apple Inc. Kyocera’s final result declined 71% to JPY 8.7 billion, after booking JPY 23 billion impairment loss on tangible assets on electronic device business...
Profit margin of listed companies seen hitting record.
The profit margin of listed Japanese companies is expected to ascend to the highest in the current fiscal year, surpassing the previous record seen before the 2008 financial crisis. According to Nikkei, aggregate pretax margin of listed companies (total 1,530 companies, excluding financial institutions and others) is expected to reach 6.6%, topping the 6.5% logged in the year ended March 2007. They have projected a combined pretax profit of JPY 34.07 trillion for the full fiscal year, up 6.9% from the record set last year. They are not only enjoying favorable conditions, such as the weak yen and cheap crude oil, but having effects of markups supported by unique technologies and offerings and expansions via mergers and acquistions. Still, compared with US companies, the profit margins of Japanese companies lag behind, and they have to hone their earning power further to achieve sustained growth.
Five automobile manufacturers post record high earnings in 6 months to Sept 2015.
Toyota’s group sales in 6 months to September 2015 stood at JPY 14 trillion (+8.9%) and operating profit at JPY 1.58 trillion (+17.1%). Both figures are record-high, reflecting stellar car sales in the North American market and a weak yen. Similarly, Nissan, Honda, Fuji Heavy and Suzuki posted record-high earnings as semiannual results, with good performance in the overseas markets, while domestic car sales were stagnant. Mitsubishi and Mazda posted declined earnings due to grown costs attributable to the recall of Takata air bags (i.e. collection and replacement), in spite of sales growth. Daihatsu posted a declind earnings due to shrunk mini car sales during the period.
Manufacturing sentiment down 1st time in three quarters
Business confidence of major Japanese manufacturers worsened for the first time in three quarters in the three months to September, weighted down by uncertainty over economic slowdowns overseas, according to the Bank of Japan’s quarterly Tankan survey. The headline index measuring sentiment at big manufacturers fell 3 points to 12. Among 16 large manufacturing sectors surveyed, the index deteriorated in 11 sectors, improved in four and remained flat in one. The gloominess was especially strong in the production machinery and professional machinery segments, which were affected by reduced exports to China, and the shipbuilding and heavy industry sectors, which also cater to emerging economies...
Major restaurant chains enjoyed a sales increase in July thanks to fine weather.
Sales of major fast food stores and restaurant chains grew 1.9% in July compared to the same month of the previous year, according to the Japan Food Service Association. The growth is due to good performance of family restaurant chains thanks to continuous sunny days in the month after the end of rainy season, and to contraction of declined rate of Macdonald’s sales after its big fall with the damange of foreign substance mixing. More precisely, dinner restaurant enjoyed 8.2% sales increase, family restaurants 4.7%, and fast food stores 0.1%. On the other hand, sales of Japanese-style pubs (izakaya) declined 3.3% in the month, and it seems attributable firstly to the declined number of pubs, compared to the last year. We also need to watch psychological effects of the recent stock price decline on their performance.