DENSO Corporation today announced its global financial results for the first quarter ending June 30, 2014:
- Consolidated net sales totaled 1,029.1 billion yen (US$10.2 billion), a 3.2 percent increase from the previous year.
- Consolidated operating income totaled 85.1 billion yen (US$839.1 million), a 16.7 percent decrease from the previous year.
- Consolidated net income totaled 68.8 billion yen (US$678.7 million), a 20.1 percent decrease from the previous year.
“The sales increased due to the production volume increase. Despite the variable cost reduction and the increase in production volume, the operating income decreased due to research and development expenditures and investment costs that will strength future growth,” said Kenichiro Ito, executive director of DENSO Corporation.
In Japan, the shift towards compact cars, as well as the decrease of export sales led to a decrease in sales to 634.3 billion yen (US$6.3 billion), a 3.0 percent decrease from the previous year. The decrease in production volume and the increase in labor costs and other expenses led to an operating income of 55.2 billion yen (US$544.8 million), a 26.6 percent decrease from the previous year.
In North America, an increase in car production, boosted by the steady economic growth, led to an increase in sales to 224.5 billion yen (US$2.2 billion), an 8.3 percent increase from the previous year. As a result of the increase in production volume and the cost reduction effort, the operating income totaled 7.5 billion yen (US$73.9 million), a 19.8 percent increase from the previous year.
In Europe, car production increased due to the economic slump recovery led to an increase in sales to 138.1 billion yen (US$1.4 billion), a 17.1 percent increase from the previous year. Due to the increase in production volume and the cost reduction effort, the operating income totaled 4.0 billion yen (US$39.3 million), a 130.5 percent increase from the previous year.
In Asia and Oceania, the increase of car production mainly in China resulted in a sales increase to 244.8 billion yen (US$2.4 billion), a 5.8 percent increase from the previous year. The increase in labor costs and the expenditure on the establishment of plants and technical centers for strengthening future growth led to an operating income of 17.2 billion yen (US$169.8 million), a 19.4 percent decrease from the previous year.
In other areas, mainly the South American region, including Brazil and Argentina, sales totaled 18.4 billion yen (US$181.3 million), a 13.1 percent decrease from the previous year. The operating loss totaled 0.2 billion yen (US$2.0 million), a 121.4 percent decrease from the previous year.
* The forecasts for the first-half and full-year financial results are unchanged, since the financial results of this first-quarter were as planned in the original forecast.
Foreign exchange rates used for the first-half and full-year financial result forecasts are: US$= 100yen Euro=135 yen)
Forecast for Fiscal Year Ending March 31, 2015
| First-Half Forecast | Full-Year Forecast | Changes from Previous FY | |
|---|---|---|---|
| Net Sales | 2,022.0 billion yen [US$19.9 billion] |
4,140.0 billion yen [US$40.8 billion] |
+44.1 billion yen (+1.1 percent) |
| Operating income | 164.0 billion yen [US$1.6 billion] |
350.0 billion yen [US$3.5 billion] |
-27.7 billion yen (-7.3 percent) |
| Income before income taxes and minority interests |
177.0 billion yen [US$1.7 billion] |
378.0 billion yen [US$3.7 billion] |
-40.6 billion yen (-9.7 percent) |
| Net income | 116.0 billion yen [US$1.1 billion] |
248.0 billion yen [US$2.4 billion] |
-39.4 billion yen (-13.7 percent) |
