Auto chip-supplier Denso’s Q1 profit tumbles 41%, misses view

Denso Corp’s robot arm “Denoute-san” plays Japanese chess, also known as Shogi, at a booth during Niconico Chokaigi 2015 in Makuhari, east of Tokyo, Japan April 26, 2015. REUTERS/Yuya Shino

TOKYO, July 29 (Reuters) – Japan’s Denso Corp (6902.T), a major supplier to Toyota Motor Corp (7203.T), 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.

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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. read more

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

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