TOKYO -- Japanese partsmaker MinebeaMitsumi appears likely to post about 79 billion yen ($722 million) in group operating profit for the fiscal year ending in March, up 6 billion yen from projections, thanks in part to stronger-than-expected sales of backlights for smartphone displays.
That would mark a roughly 60% gain over adjusted results from the preceding fiscal year, when the company formed through a merger.
Full-year sales are expected to grow roughly 30% to about 840 billion yen, with roughly half coming from electronic devices and components. The company had anticipated weaker demand for light-emitting diode backlights as Chinese smartphone makers switch to organic LED panels in an effort to produce thinner products. But the business has outperformed the forecast so far. Motors used in car doors and other automotive applications also are seeing growth.
The core machined components segment contributes half the group's operating profit. Smaller bearings designed for automotive uses are selling well, thanks to the growing number of motors and other electric components in cars. Demand for products used in data center servers is rising as well.
A push for better energy-saving appliances such as vacuum cleaners and hair dryers also lifted demand for smaller bearings, one of MinebeaMitsumi's strengths. The company hopes strong sales in these fields will make up for a lull in aircraft-related orders, caused by decreased production of larger planes.
The current company formed through a January 2017 merger between bearing maker Minebea and Mitsumi Electric. Former Mitsumi operations are expected to lift groupwide operating profit this fiscal year by nearly 20 billion yen. Game console components are selling better than expected, while demand for camera actuators and other products is growing as well.
Mitsumi suffered a 14.2 billion yen operating loss for April-December 2016, prior to the merger. But operating profit margins are expected to improve to about 10% this fiscal year, thanks to adopting Minebea's know-how on quality control as well as consolidating logistics and procurement.
MinebeaMitsumi -- which announced last month it had co-developed a fidget spinner that set a Guinness World Record for the longest spin -- will report results for the nine months ended in December on Wednesday.