Toyota's Hybrid Vehicles Perform Well in North America
Nintendo, NTT, and the Three Megabanks Also Exceed Forecasts
Among listed Japanese companies, Honda was selected as the company for which the market has the highest expectations for an earnings upgrade. As motorcycle sales, centered on Asian markets, hit an all-time high, profit improvement is anticipated.
The Nihon Keizai Shimbun (Nikkei) reported on the 26th (local time) that, based on an analysis using Quick consensus market forecasts and other data, Honda was the company whose earnings for the fiscal year ending in March this year (from April last year through next month) were expected to exceed its own guidance by the largest margin. The market estimates Honda's net profit at 474 billion yen (about 4324.4 billion won), which is 174 billion yen higher than the company's forecast of 300 billion yen.
Honda's motorcycle business performance has surged. From April to December last year, Honda's motorcycle sales reached 16.44 million units, the highest level on record. Shinya Naruse, senior analyst at Okasan Securities, said, "The automobile business is struggling due to losses related to electric vehicles (EVs), but expectations for the motorcycle business are high."
In the automobile industry, Toyota Motor ranked second, Subaru ranked 11th, and Mitsubishi Motors ranked 17th. Toyota is seeing strong sales of hybrid vehicles in North America, and unit sales are also increasing in India. Subaru revised its net profit forecast for the fiscal year ending March this year down to 125 billion yen, 35 billion yen lower than its previous estimate, representing a 63% year-on-year decrease. However, in the market, the prevailing view is that conditions will not deteriorate as much as the company expects.
In the non-manufacturing sector, NTT ranked sixth and Nintendo seventh. This month, NTT revised its full-year net profit forecast to a 4% decline from the previous year, as costs to acquire smartphone customers increased more than expected. However, the market expects that growth in IT services and other areas will allow NTT to achieve a 2% increase in profit. Nintendo's "Nintendo Switch 2" is performing well. Net profit for the April-December period last year was 358.8 billion yen, up 51% from the same period a year earlier. It has already exceeded the company's forecast of 350 billion yen for the fiscal year ending March this year.
Japan's three major megabank groups-Mizuho Financial Group, Mitsubishi UFJ Financial Group, and Sumitomo Mitsui Financial Group-all ranked within the top 10. For all three megabanks, progress in net profit for the April-December period last year had already reached about 90% of their full-year net profit forecasts for the fiscal year ending March this year.
At the beginning of the fiscal year ending March this year, companies listed on the Tokyo Stock Exchange (TSE) Prime Market were expected to see net profit decline by 8% year-on-year. However, as upward revisions have continued, the forecast as of mid-February has swung to a 1% increase. Expectations for further upward revisions are high, and among the companies included in the ranking, 73% have market forecasts that exceed their own guidance. Nikkei projected that, if the market's expectations are realized, overall net profit for listed companies will increase by 4%.
Shingo Ide, chief equity strategist at NLI Research Institute, told Nikkei, "Corporate plans were quite conservative after the tariff policy of the Trump administration in the United States suddenly emerged last spring," adding, "Since tariffs were reduced in September, the external environment has remained solid, and as price pass-through has progressed due to the impact of inflation, the pattern of rising sales and increasing profits has continued."
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