Minebea profit seen sinking 40% on smartphone slump
TOKYO -- Bearings maker Minebea's operating profit for the April-June period likely plunged 40% on the year to around 7 billion yen ($65.6 million) due in part to sluggish sales of smartphone lighting components.
The Japanese manufacturer supplies LED backlights for smartphone screens. The electronic components and devices business accounted for about 40% of overall operating profit last fiscal year, emerging as a key segment along with the mainstay machined parts business.
But the electronic parts business is struggling now because of weaker sales of the backlights for existing smartphone models. New smartphones usually do not debut in the April-June quarter, a factor contributing to the slowdown. With plant operating rates down, fixed costs increased.
Expenses associated with the planned integration with Mitsumi Electric in March look to have squeezed profit as well.
Sales likely shrank 6% to around 120 billion yen, with the Japanese currency's relative strength from a year earlier taking a bite out of overseas revenue in yen terms.
But the operating profit figure is still higher than the 5.5 billion yen the company projected at the start of the fiscal year. Brisk orders of bearings for automotive and appliance applications likely bolstered earnings. Small bearings -- Minebea's specialty -- are often used in energy-saving and other advanced models so demand for them was robust. Unit sales of bearings rose to a record high in June.
For the full year through March, the company is expected to keep its forecast unchanged in light of exchange rate uncertainty. It projects operating profit to slide 13% to 45 billion yen and sales to fall 8% to 560 billion yen. The company is scheduled to release first-quarter results Aug. 2.
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