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Firms cut profit outlook on worries about trade tensions

Jiji PressTOKYO (Jiji Press) — Companies are increasingly worried about the outlook for their profits for the year ending next March despite strong performance in the first half, their earnings reports show.

They are apparently concerned about the impact on earnings from trade tensions between the United States and China and new trade talks between Washington and Tokyo, analysts said.

A Jiji Press tally showed that major nonfinancial companies have so far reported a 4.1 percent sales rise and a 4.3 percent net profit increase for the six months ended in September from a year before.

The tally covered 520 companies, or about 40 percent, of 1,303 companies that are listed on the Tokyo Stock Exchange’s First Section and close their books in March.

Sony Corp.’s net profit surged 88 percent to a record thanks chiefly to brisk game operations.

Honda Motor Co.’s net profit grew 19 percent, supported by robust motorbike sales in Asia.

But the tally found that 102 companies cut their full-year net profit projections, far larger than the 83 companies that raised their estimates.

Mazda Motor Corp. cut its profit estimate, citing negative effects from heavy rain that hit western Japan in July and a possible slowdown in demand in China.

Shipping firms Kawasaki Kisen Kaisha Ltd. and Nippon Yusen K.K. estimated full-year losses partly due to a possible decline in cargo traffic between the United States and China.

“Many corporate managers have a pessimistic view at the moment,” Kazuhiro Takahashi, equity strategist at Daiwa Securities Co., said, citing an impact from a global stock market sell-off in October and concern about next week’s U.S. midterm elections and the U.S.-China trade fight.

Ono posts record net profit

OSAKA (Jiji Press) — Ono Pharmaceutical Co. has reported a record net profit for April-September thanks to strong sales related to its blockbuster cancer drug Opdivo.

The net profit for the first half of fiscal 2018 grew 36 percent from a year earlier to ¥28.84 billion, according to the company’s earnings report released Thursday. The company also revised up its sales and net profit forecasts for the full year to next March.

Opdivo sales grew 11.9 percent to ¥45.4 billion. Increased royalty revenue from foreign companies also contributed to the higher earnings.

Opdivo was developed based on research by scientist Tasuku Honjo, who won this year’s Nobel Prize in Physiology or Medicine.

The price of Opdivo was halved in Japan in February last year and lowered further in April this year following price reviews by the government.

But Opdivo shipments rose 40 percent after government approval of increased use, including for stomach cancer treatment.

Ono Pharmaceutical plans to apply for permission to use the drug for the treatment of esophageal cancer and hepatocellular cancer. In addition, sales in China are expected to start within this fiscal year.

There are reportedly differences in opinion between Honjo, a distinguished professor at Kyoto University, and the company on the relations between Honjo’s research and the development of Opdivo.

“The impact of the Nobel Prize win has been limited,” company President Gyo Sagara told a press conference Thursday.

But the win may put the company in a better position for recruiting thanks to improvements in the name recognition and brand image of the company, Sagara said.Speech

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