TOKYO -- Denso Corp. reported a 12 percent rise in its first-half operating profit on Friday, thanks to strong auto sales worldwide, although it fell a tad short of market expectations, and it raised its outlook by 9 percent.
The world's fourth-largest auto parts supplier has benefited from robust sales at Toyota Motor Corp., which owns 23 percent of Denso, and its group firms in Asia as well as the U.S. market.
Denso makes almost half of its total annual revenue from group firms of Toyota, the world's second-biggest automaker, including minivehicle firm Daihatsu Motor Co. and truck maker Hino Motors Ltd. Denso reported a group operating profit of 119.74 billion yen ($1.04 billion) in the six months to September, up from 107.32 billion yen a year earlier. It fell short of analysts' consensus projection of 121 billion yen.
Denso, whose products include spark plugs, car heating and air conditioning systems and oil filters, raised its full-year operating profit forecast to 255 billion yen from 233 billion yen.
That compares with a consensus projection of 250 billion yen in a poll of 16 analysts by Reuters Estimates before the revision.
"Strong performance at automakers, especially Japanese automakers, is supporting our earnings," a Denso spokesman said. "We have offset high material costs by rationalization efforts."
Denso, valued at around $24 billion, stands behind Germany's privately held Robert Bosch GmbH, U.S.-based Delphi Corp. and Canada's Magna International Inc.
In contrast to Denso's health, Delphi filed the biggest bankruptcy petition in U.S. automotive history earlier this month. The company has been hurt by high wage and benefit costs and market share losses at former parent General Motors that lowered demand for its parts.
Denso's half-year net profit beat analysts' and its own forecasts, rising 1.2 percent year-on-year to 67.23 billion yen despite a special loss. Sales totalled 1.5 trillion yen in the six months, up 11.2 percent from a year earlier.