Toyota supplier Denso cuts forecast after Q3 profit hit by extra costs
Reuters
Published Feb 01, 2024 09:29PM ET
Updated Feb 01, 2024 10:20PM ET
TOKYO (Reuters) -Japan's Denso, a leading supplier to Toyota (NYSE:TM), slashed its annual earnings forecasts on Friday after third-quarter profits were hit by additional quality-related cost reserves, missing analysts' estimates.
Denso cut its operating profit forecast for the financial year to March 31 by 21% to 495 billion yen ($3.38 billion), missing the average estimate of 623.2 billion yen, according to 17 analysts surveyed by LSEG.
The world's second-biggest maker of automotive components said operating profit slumped to 26.8 billion yen in the three months to Dec. 31, from 112.5 billion yen a year earlier and fell well short of market estimates of 177.1 billion yen in a poll of eight analysts by LSEG.
Denso gets about half of its revenue from the Toyota group, which also includes Toyota truck unit Hino Motors and small-car maker Daihatsu.
It booked 151.8 billion yen in quality-related costs in the latest quarter as it faces the fallout of recalling faulty fuel pumps.
The revenue impact of the issues at Daihatsu is expected to be about 17 billion yen in the fourth quarter, Denso CFO Yasushi Matsui told reporters.
Its shares were volatile, selling off over 2% before rebounding and ending the morning session 4.4% higher. ($1 = 146.4000 yen)
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Written By: Reuters
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