TOKYO -- Nippon Sheet Glass on Wednesday slashed its net profit forecast for the fiscal year ending in March by 7 billion yen ($61.7 million), as the recently passed U.S. corporate tax cut forces it to write down deferred tax assets.
The Japanese glassmaker had expected net profit to rise 43% from fiscal 2016 to 8 billion yen, but now sees an 82% drop to 1 billion yen. The American tax overhaul cuts the corporate tax rate from 35% to 21% in 2018, lowering the value of deferred tax assets previously estimated using a higher rate.
U.S. production and sales of such products as architectural and automotive glass account for nearly 30% of Nippon Sheet Glass's operating profit. The company is taking a one-time charge of 10 billion yen to reflect the change.
Meanwhile, the glassmaker boosted its pretax profit projection by 3 billion yen, citing lower restructuring, depreciation and other costs than initially expected. It maintained forecasts for sales growing 3% to 600 billion yen and operating profit rising 21% to 36 billion yen.
Nippon Sheet Glass is not the only Japanese company expecting a one-off hit from the U.S. tax overhaul, which is expected to help businesses over the long term. DIC, Japan's largest ink producer, on Monday downgraded its net profit forecast for 2017 by 6 billion yen.