Denso's Q1 jumps

TOKYO -- Top Japanese car parts maker Denso Corp. posted a 16 percent rise in quarterly operating profit on Thursday as sales grew around the world, and mapped out a plan to boost revenue by at least 25 percent by 2010.

Shares in Denso shot up 8.9 percent at one point after the news before closing at 3,790 yen, up 5.87 percent on the day.

Denso, affiliated with Toyota Motor Corp., has enjoyed record earnings largely thanks to the rapid expansion at Japan's top auto maker, which along with units Daihatsu Motor Co. and Hino Motors Ltd. accounts for just under half of Denso's revenue.

But Denso is also boosting business with overseas auto makers armed with advanced electronic controls and other must-have technology, and said a 19 percent revenue rise in the Americas last quarter was led by more sales to GM, Toyota and other assemblers.

For the April-June first quarter Denso, valued at $27 billion -- more than twice the market capitalisation of Ford Motor Co. -- posted an operating profit of 82.54 billion yen ($709.5 million).

Net profit jumped 63 percent to 58.55 billion yen on sales of 856.23 billion yen, up 13.6 percent.

It kept its full-year forecasts for an operating profit of 282 billion yen, net profit of 173 billion yen and revenue of 3.38 trillion yen.

"We are pleased with the favourable financial results for this first quarter," Managing Officer Koji Kobayashi said in a statement, attributing the growth to a rise in domestic production of export-bound cars and improved sales overseas.

Announcing a much-awaited midterm plan, Denso said it would target group revenue of more than 4 trillion yen ($34.4 billion) and a return on equity (ROE) of 10 percent by 2010. In the year ended March 31 it had sales of 3.188 trillion yen and an ROE of 9.4 percent.

To secure the growth, Denso, a leading provider of hybrid systems, common rail diesel and other cutting-edge technology, said it would also aim to establish non-automotive and aftermarket businesses as one of the main areas of growth.

Denso is second on the Automotive News ranking of top global suppliers with $22.8 billion in original equipment sales in 2005.

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