Shares of Sumitomo Electric Industries saw a significant boost following an upward revision of its fiscal-year earnings outlook. The company attributed this positive adjustment to the recovery in auto production and the depreciation of the yen.
As of now, Sumitomo Electric Industries’ shares have climbed by 11% to 1,800.0 yen, with a peak rise of 12% earlier in the day.
In an announcement made on Thursday after the market closed, Sumitomo Electric Industries shared its projection of a 2.4% decline in net profit to Y110.00 billion ($735.6 million) for the fiscal year ending in March 2024. This stands as an improvement from its previous forecast of Y100.00 billion. Note that Japanese markets were closed on Friday in observance of a national holiday.
Highlighting that first-half results surpassed expectations, the Japanese company attributed this performance to increased car production, which consequently drove up the demand for parts. This was made possible by an easing of chip shortages. Additionally, a weaker yen contributed to boosted earnings.
During the six months ending on September 30, net profit experienced a 24% drop, amounting to Y26.70 billion. This decline was mainly influenced by a rise in borrowing costs and a decrease in gains from asset sales compared to the previous year.
On a more positive note, first-half revenue witnessed a growth of 9.6%, reaching Y2,072 trillion. The increased sales of wire harnesses, anti-vibration rubber, and power cables played a significant role in driving this upward trajectory.
