Analysis of earnings projections by listed Japanese firms shows their combined net profit could slump by nearly 6 percent this fiscal year. Many businesses are anticipating higher costs and less trade due to looming US tariffs.
Most listed firms have released earnings results for the year that ended in March. Their reports include outlooks for this fiscal year.
SMBC Nikko Securities analyzed figures from 1,142 firms. That’s 99 percent of the names on Tokyo’s broad-based TOPIX index.
Combined profit for the last fiscal year was up by 8.2 percent from the one before. The yen figure was likely a record, extending the run of fresh highs to a fourth consecutive year.
It’s a different story for this fiscal year. Combined net profit is expected to drop 5.7 percent. That figure is based on a slightly smaller number of firms. Sixty companies have not provided an outlook yet.
The analysis shows 664 firms are expecting a bigger profit. That’s 58 percent. But 407 firms, or 35 percent, predict declines.
Automobiles, steel and shipping are the most bearish sectors.
Nissan, Mazda and Subaru are yet to report their projections for this fiscal year. But automakers which have released forecasts expect net profit to plummet by 27.6 percent. That amounts to almost 2 trillion yen, or about 13.8 billion dollars.
The projected drop is the largest among all industries in yen terms.