TOKYO, Feb 10, 2019, Jiji Press. Major nonfinancial Japanese companies are expected to post lower consolidated net profits for the first time in three years for the year through next month, a Jiji Press survey showed on Friday, reported The Japan News.
These firms’ combined net profit is likely to fall 3.9 percent from the previous year due mainly to slowing economic growth in China amid trade tensions with the United States.
The survey covered 1,080 companies that announced April-December results by Friday. They account for 83 percent of nonfinancial companies listed on the First Section of the Tokyo Stock Exchange.
Of the total, 149 firms, or 14 percent, revised down their net profit estimates for the year, compared with 95 companies that made upward revisions.
In particular, downward revisions were conspicuous in the electronics sector, which struggled with China’s slowdown and weakening smartphone demand globally.
Major companies enjoyed strong earnings in the first half ended in September, with a 10.7 percent increase in combined net profit from a year before, but lost momentum quickly from last autumn.
The combined net profit tumbled 22.7 percent in the three months ended in December from a year before.
Among major firms, Toyota Motor Corp. cut its net profit forecast by ¥430 billion due to share appraisal losses. Seasoning producer Ajinomoto Co. booked an impairment loss of ¥26.8 billion because of poor overseas business.
“Corporate earnings worsened more than expected, and conditions will remain tough in the next business year,” said Hisao Matsuura, chief equity strategist at Nomura Securities Co.Speech