DENSO announces third-quarter financial results, reports increased consolidated net sales

DENSO Corporation's global financial results for the third quarter ended Dec. 31, 2007 exceeded the company's expectations, with consolidated net sales totaling 1,029.2 billion yen (US$9.0 billion), a 10.9 percent increase from the previous year. The company's consolidated operating income also increased, rising 16.9 percent to a total of 104.1 billion yen or US$909.6 million. DENSO also reported that consolidated net income for the quarter totaled 73.8 billion yen (US$644.3 million), a 19.5 percent increase from the previous year.

"Our sales growth was mainly due to the increase in domestic and overseas car production for Japanese auto manufacturers," says Koji Kobayashi, senior managing director of DENSO Corporation. "In spite of the increases in depreciation and labor costs, increased production volume and cost reduction efforts led to an increase in operating income."

In Japan, sales totaled 713.0 billion yen (US$6.2 billion), a 7.1 percent increase from the previous year. Increased export of vehicles contributed to the increase in sales. Despite production volume increases and cost reduction efforts, the increase in depreciation costs associated with a tax law change in Japan led to operating income of 64.9 billion yen (US$567.1 million), a 7.6 percent decrease from the previous year.

In North, Central and South America, increased production volume for Japanese auto manufacturers and sales expansion to General Motors and Ford led to an increase in sales to 197.9 billion yen (US$1.7 billion), a 6.8 percent increase from the previous year. Operating income increased to 9.2 billion yen (US$80.2 million), an increase of 64.4 percent from the previous year. Increased production volume of navigation systems and air conditioners and cost reduction efforts resulted in an increase in operating income.

In Europe, sales expansion to Ford, Fiat and PSA raised sales to 156.5 billion yen (US$1.4 billion), an 18.2 percent increase from the previous year. Operating income increased to 5.8 billion yen (US$50.5 million), an increase of 76.2 percent from the previous year, as a result of increased production volume of air conditioners and diesel common rail systems.

In Asia and Oceania, sales totaled 157.6 billion yen (US$1.4 billion), a 27.6 percent increase from the previous year, thanks to the increased car production for Japanese auto manufacturers in ASEAN and China. Operating income more than doubled from 11.8 billion yen (US$102.9 million) the previous year to 24.5 billion yen (US$213.9 million), due to the sales expansion of air conditioners and diesel common rail systems and the stable expansion of operations in China.

"Considering the recent rapid appreciation of the yen and the possibility of an economic slowdown, we have kept our fiscal year 2007 estimate announced on Oct. 31, 2007," adds Kobayashi.

The company's forecast for the coming fiscal year includes net sales of 3,950.0 billion yen (US$34.5 billion), a 9.4 percent increase from the previous fiscal year. DENSO also predicts its operating income to increase 11.2 percent and to reach 337.0 billion yen (US$2.9 billion). The company projects a net income of 228.0 billion yen (US$2.0 billion) when the fiscal year ends on March 31, 2008, which is an 11.1 percent increase over the previous year.

For more information about DENSO's global activities, visit the company's Web site.