Strong yen pushes SMC's April-June profit down
TOKYO -- SMC announced Friday that net profit for the April-June quarter fell 19% on the year to 24.8 billion yen ($243 million), blaming a strong yen that eroded overseas earnings.
The Japanese air compressor manufacturer incurred a 15 billion yen loss on foreign currency receivables and payables due to the yen's appreciation. Dragged down by that non-operating expense, pretax profit plunged 45% to 24.2 billion yen.
While demand remained steady for automated control equipment used at automobile factories, it could not absorb the impact of the rising yen. Sales slumped 5% to 117.7 billion yen, and operating profit fell 4% to 36.4 billion yen. By country and region, operating profit dropped 15% in Japan and 26% elsewhere in Asia. North America and Europe's operating profit remained relatively solid.
For the full year ending in March, the company maintained its initial projections. Sales are projected to decline 5% to 450 billion yen, with net profit to drop 11% to 82 billion yen.