DENSO (6902) Q1 2025 earnings summary

Executive summary

• Revenue rose 2.4% year-over-year to ¥1,753.8B, aided by yen depreciation, despite lower vehicle production in Asia and operational suspensions in Japan.

• Operating profit increased 27.7% year-over-year to ¥120.6B, driven by foreign exchange gains, cost reductions, and business improvement efforts.

• Profit attributable to owners of the parent grew 10.5% year-over-year to ¥94.5B.

• Both sales revenue and operating profit fell short of previous forecasts, prompting a downward revision for the full-year outlook.

• Comprehensive income dropped sharply to ¥44.6B from ¥555.8B a year ago, mainly due to a significant decline in other comprehensive income.

Financial highlights

• Revenue: ¥1,753.8B (+2.4% year-over-year); Operating profit: ¥120.6B (+27.7% year-over-year).

• Profit before income taxes: ¥137.7B (+6.5% year-over-year); Net profit: ¥94.5B (+10.5% year-over-year).

• Gross profit improved to ¥251.8B from ¥228.0B year-over-year.

• Basic EPS was ¥32.45, up from ¥28.53 year-over-year.

• Operating profit margin improved to 6.9% from 5.5% a year ago.

Outlook and guidance

• FY2025 revenue forecast revised down to ¥7,330.0B and operating profit to ¥692.0B, reflecting Q1 downside.

• Full-year operating profit margin expected at 9.4%; ROE forecast at 9.3%.

• Profit attributable to owners of the parent projected at ¥525.0B, up 67.8% year-over-year.

• Assumed exchange rates for the remainder of the year: 1 USD = 155 yen, 1 EUR = 145 yen.

• Management expects slow vehicle sales in Asia to persist, but the impact of suspended Japanese operations to lessen from Q2.