Top Japanese car parts supplier Denso Corp. posted a 21 percent jump in annual profit riding domestic carmakers' robust growth and expanded sales to foreign makers, and provided cautious guidance for the year ahead as expected.
Denso, a quarter held by Toyota Motor Corp., said today its group net profit hit a record $1.73 billion (205.17 billion yen) for the year ended March 31 as sales grew 13 percent to $30.23 billion (3.610 trillion yen).
Operating profit at Denso, based in Aichi prefecture in central Japan, climbed 14 percent to $2.54 billion (303.07 billion yen).
For the year to the end of March 2008, the maker of advanced electronics and other vehicle components forecast a 0.9 percent rise in net profit to $1.73 billion (207 billion yen) and a 1.6 percent rise in operating profit to $2.58 billion (308 billion yen).
"Denso is well-placed to benefit from an increase in its value-added business domains under Toyota's new cost-cutting program," JPMorgan Securities Takaki Nakanishi wrote in a report, noting that Denso typically starts off with conservative forecasts that are later lifted.
Toyota and its group companies account for roughly half of Denso's revenues.
Nakanishi said he expected double-digit percentage growth in Denso's earnings to continue over the medium term, backed by brisk expansion overseas including in China and Europe.
Denso said it plans to buy back up to 6.5 million of its shares, or up to $272.2 million (32.5 billion yen) worth and equivalent to 0.8 percent of its outstanding shares in the 12 months from June 27.