TOKYO (Reuters) -Japan’s Denso, a leading supplier to Toyota, reduced its full-year operating profit forecast by 3.1% on Wednesday after reporting first-quarter profit that was largely in line with analysts’ expectations.
The company lowered its operating profit forecast for the financial year to March 31 to 692 billion yen ($4.53 billion) from 714 billion yen, missing the average estimate of 709.9 billion yen, according to 17 analysts surveyed by LSEG.
The cut only reflected Denso’s first-quarter result, which was lower than the company had expected, it said in a statement. It maintained its forecast for the rest of the financial year.
The world’s second-biggest maker of automotive components said operating profit rose 28% to 120.6 billion yen in the April-June period, beating the 117.3 billion yen average estimate of seven analysts.
A year earlier, the company earned 94.4 billion yen in profit.
Denso gets more than half its revenue from the Toyota group, including truck unit Hino Motors and small-car maker Daihatsu.
The company said its operating profit increased in the quarter due to foreign exchange gains and efforts to boost its profitability even though production volumes dropped amid poor vehicle sales in Asia.
Denso said last month it had divested holdings in several Toyota-affiliated companies after pledging in April to sell all of its cross-shareholdings as it looks to fund acquisitions and other investments.
Its shares were volatile, selling off sharply before recovering and ending the morning session 1.4% higher. ($1 = 152.6500 yen)
(Reporting by Daniel Leussink; Editing by Shri Navaratnam and Savio D’Souza)