TOKYO -- Denso Corp.'s profits rose sharply in the quarter ended Dec. 31, 2005, as the supplier giant rode production increases by Japanese carmakers at home and abroad.
Denso's strong results contrast sharply with those of such troubled suppliers as Delphi Corp. and Visteon Corp. Delphi has sought bankruptcy protection for its North American operations.
Denso ranks No. 4 on Automotive News' 2005 list of the top 100 global parts suppliers, behind only Robert Bosch GmbH, Delphi and Magna International Inc.
Denso raised its profits forecast for the entire fiscal year ending March 31, 2006. It now expects net profit this fiscal year to rise 20.6 percent to ¥160 billion, or $1.36 billion at current exchange rates.Operating profits jumped 36.3 percent to $730.4 million in the three months to Dec. 31 compared with a year earlier. Net income surged 42.3 percent to $479.8 million.
Revenues rose 17.1 percent to $6.85 billion.
Revenues grew at a double-digit pace in all regions. It grew 23.9 percent in Japan, Denso's largest market.
Operating profits slipped 2.9 percent in the Americas, however, to $35.8 million. Denso cited costs related to production increases at its plant in Arkansas and additions to its product lineup.
Denso's operating margins in the Americas were 2.5 percent. That is well below its margins of 12.0 percent in Japan and 11.3 percent in Asia and Oceania.
European operating profits rebounded to $8.0 million from a year-earlier loss of $29.8 million. Denso credited increased sales of car navigation systems and air conditioners, plus higher production volumes at its factories in Hungary and the Czech Republic.
Yen amounts were converted at an exchange rate of $1=¥118.07, the rate prevailing on Dec. 31.
You may e-mail James B. Treece at [email protected]