TOKYO -- Over 30% of listed companies in Japan have upwardly revised their net profit forecasts for the fiscal year ending March, according to Nikkei research, with the trend largely led by Japanese manufacturers that sell products globally such as carmakers.
Overall profits, however, are expected to be more than 30% lower than in the previous year. Despite the situation generally improving for corporate Japan, there are still concerns a further wave of coronavirus infections could hurt businesses.
As of Tuesday, 1,106 listed companies with fiscal years ending in March had disclosed their estimates for net profit for this fiscal year. Apart from companies that disclosed estimates for the first time in their April-September financial results, 32% of the remainder made upward revisions to their profit estimates, 8% made downward moves and 60% kept their forecasts the same.
On Nov. 6, Toyota Motor revised its net profit for the current fiscal year to 1.42 trillion yen ($13.47 billion), almost double the previous estimate three months earlier. Consumption in China is recovering as the country contained the spread of the coronavirus faster than the rest of the world. Boosted by China's brisk demand, Toyota's monthly car sales hit a record high in September.
Both Sony and Nintendo revised their profit forecasts higher as video game sales have soared as a new trend of "stay-at-home consumption" has been expanding throughout the world amid the pandemic. Fanuc, the producer of the Robodrill used in manufacturing smartphones and computers, also upwardly revised its profit forecast.
Out of companies that lifted forecasts, more than 60% are manufacturers. And in terms of value, manufacturers account for nearly 90%.
But on the other hand, the service sector -- which contains airlines and railway operators -- is struggling to recover as people work from home and refrain from going out. Of companies that announced their first full-year forecasts in the April-September period, many expect their largest-ever deficit amid the continuing uncertainty.