TOKYO :Japan’s Denso, a leading auto parts supplier to Toyota, posted a bigger-than-expected 11 per cent decline in first-quarter profit on Friday, hit by U.S. tariffs and a stronger yen.
The world’s second-largest car parts manufacturer reported an operating profit of 107.2 billion yen ($720 million) for the three months to the end of June.
That was well below an average estimate of 130 billion yen from seven analysts surveyed by LSEG.
The company maintained its prediction for full-year operating profit to climb 23 per cent to 675 billion yen, while raising its revenue target for the period by 2 per cent from an earlier estimate.
Its initial estimates were made in late April, after U.S. President Donald Trump’s announcement of reciprocal tariffs on trading partners.
Denso on Friday estimated the hit to full-year operating profit from U.S. tariffs to be 130 billion yen, and said it was looking for ways to partially offset the impact.
“We’ll take measures such as making things in the U.S. that can be made there … in order to thoroughly reduce it (the impact),” Yasushi Matsui, the company’s chief financial officer, told reporters.
Trump has imposed a blanket 10 per cent tariff on trading partners. Last week, Japan struck a trade deal with the U.S. that lowers tariffs on the country’s cars and other goods to 15 per cent in exchange for Japan investing $550 billion in the United States.
Denso gets more than half its revenue from Toyota group companies, including truck unit Hino Motors and small-car maker Daihatsu.
($1 = 148.92 yen)
