TOKYO (Reuters) -Japan’s Denso Corp, a major supplier to Toyota Motor Corp, reported on Friday a 41% slump in first-quarter profit that missed market expectations, hurt by automakers cutting production and by high commodities and logistics costs.
Denso’s operating earnings of 63.6 billion yen ($473.32 million) for the three months to June 30 fell short of an average estimate of 80.8 billion yen from 10 analysts according to Refinitiv data. A year earlier, the company earned 107.2 billion yen.
The company lowered its full-year operating forecast to 480 billion yen from 560 billion yen for the year ending March 31.
Denso, which makes semiconductors for cars, has responded to a severe chip shortage with partnership deals aimed at securing access to key components.
The two-year long crunch and supply disruptions caused by China’s COVID-19 curbs have forced car makers including Toyota to repeatedly cut production, and on Thursday the Japanese automaker said production for the April-June quarter fell some 10% short of its initial plan.
But a recent glut in chip supplies due to a pullback in demand in other markets like consumer electronics may finally start to ease things for car makers. Toyota struck a more optimistic note for its business from August.
($1 = 134.3700 yen)
(Reporting by Satoshi Sugiyama; Editing by Shri Navaratnam and Muralikumar Anantharaman)
