Big Japanese firms swinging back to black, led by cost-cutting+

TOKYO, Aug. 1 Kyodo -
The earnings of major Japanese companies are believed to have hit bottom as
they returned to the black in the April-June period from losses in the previous
quarter, backed by cost-cutting and better market conditions, according to a
recent brokerage firm survey.
Of companies listed on the First Section of the Tokyo Stock Exchange, 401 had
released April-June earnings results as of Thursday, with their combined pretax
profits totaling 1.03 trillion yen on an all-industry basis, a turnaround from
a loss of 2.19 trillion yen in the January-March quarter amid the global
economic downturn, Nikko Cordial Securities Inc. said.
The latest data shows many major companies posted pretax profits or reduced
losses in the first quarter of fiscal 2009 through next March.
But the April-June combined profit is more than 70 percent lower than the
year-before level before the deepening of the global economic slump.
According to Nikko, combined sales at the 401 firms dropped 10.7 percent to
44.06 trillion yen in the April-June period, indicating the recovery in profits
relied mainly on rationalization efforts as mainstay businesses remained
sluggish.
The 401 companies account for around 30 percent of the 1,360 firms listed on
the TSE's main section that close their books at the end of March. The 1,360
companies are expected to complete the announcement of their April-June
earnings results by Aug. 14.
Of the 401, major companies engaged in Japan's mainstay industries such as
autos, electronics and financials showed an overall improvement in business
performance.
''There is a strong possibility that the listed firms as a whole will post
pretax profits,'' a Nikko analyst said.
By sector, electric appliance, transport equipment and machinery makers
narrowed their losses while banks, securities houses and retailers returned to
the black, Nikko said.
Chemical and telecommunications companies boosted profits but losses at
steelmakers widened and construction firms fell into the red, it said.
Given continued weak demand at home and abroad, it is uncertain whether
Japanese companies will be able to get on a stable recovery track.
Most of the 401 companies maintained their fiscal 2009 earnings projections,
citing uncertainty over the future course of the economy.
==Kyodo
2009-08-02 00:12:44