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Mitsubishi Electr. : Mitsubishi Electric Announces Consolidated Financial Results for the First Quarter of Fiscal 2012

07/29/2011 | 12:35am US/Eastern
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Mitsubishi Electric Corporation (TOKYO:6503) announced today its financial results for the first quarter ending June 30, 2011, of the current fiscal year ending March 31, 2012 (fiscal 2012).

 

Consolidated Financial Results

Net sales:   813.6 billion yen   (4% increase from the same quarter last year)
Operating income: 52.2 billion yen (1% increase from the same quarter last year)
Income before income taxes: 49.2 billion yen (5% increase from the same quarter last year)

Net income attributable to
Mitsubishi Electric Corp.:

27.1 billion yen

(4% increase from the same quarter last year)

 

Management conditions during the first quarter of fiscal 2012 experienced a trend of recovery owing to ongoing buoyancy in demand for capital expenditures mainly in Asia, despite a sharp drop in domestic industrial production due to the Great East Japan Earthquake and Japanese yen appreciating against U.S. dollars.

Under these circumstances, first quarter consolidated net sales rose by 4% compared to the same period of the previous fiscal year to 813.6 billion yen, owing to increased revenue from the Energy and Electric Systems, Industrial Automation Systems, Electronic Devices and Home Appliances segments, and other factors.

Consolidated operating income increased by 1% compared to the same period of the previous fiscal year to 52.2 billion yen due to higher profits from the Industrial Automation Systems, Electronic Devices and Home Appliances segments, and other factors.

 

Consolidated Financial Results by Business Segment

Energy and Electric Systems

Total sales:   194.2 billion yen   (1% increase from the same quarter last year)
Operating income: 14.5 billion yen (0.9 billion yen decrease from the same quarter last year)

The social infrastructure systems business saw an increase in orders compared to the same period of the previous fiscal year owing to growth in the Japanese domestic power generation business, while experiencing decreased sales from the same period of the previous fiscal year due to a decline in the rolling stock equipment business in Japan.

The building systems business experienced increases in both orders and sales compared to the same period of the previous fiscal year, owing to increased demand for elevators and escalators in China and the ASEAN markets, as well as sales recorded for large-scale projects in China and the Middle East.

As a result, total sales for this segment increased by 1% from the same period of the previous fiscal year. Operating income decreased compared to the same period of the previous fiscal year by 0.9 billion yen due primarily to a shift in sales components.

 

Industrial Automation Systems

Total sales:   233.9 billion yen   (9% increase from the same quarter last year)
Operating income: 27.9 billion yen (0.9 billion yen increase from the same quarter last year)
 

The factory automation systems business saw increases in both orders and sales from the same period of the previous fiscal year owing to growth in demand in the Asian market, including industrial machinery-related investments in China and flat panel display and semiconductor-related investments in Korea and Taiwan.

The automotive equipment business saw decreases in both orders and sales from the same period of the previous fiscal year with Japanese automotive manufacturers experiencing decreases in production volume due to impacts from the Great East Japan Earthquake, despite expansions in emerging markets including China and India, as well as a recovery in the North American market.

As a result, total sales for this segment increased by 9% from the same period of the previous fiscal year. Operating income increased by 0.9 billion yen compared to the same period of the previous fiscal year mainly due to an increase in sales.

 

Information and Communication Systems

Total sales:   86.2 billion yen   (5% decrease from the same quarter last year)
Operating income (loss): (0.3 billion yen) (2.0 billion yen decline from the same quarter last year)
 

The telecommunications equipment business saw decreases in both orders and sales compared to the same period of the previous fiscal year due to decreases in demand for communications infrastructures.

The information systems and service business saw no changes in sales from the same period of the previous fiscal year despite increases mainly in the network and system operations business.

The electronic systems business saw a decrease in orders compared to the same period of the previous fiscal year due to a decrease in large orders for the space systems business, while sales were unchanged from the same period of the previous fiscal year.

As a result, total sales for this segment showed a decrease of 5% compared to the same period of the previous fiscal year. Operating income declined by 2.0 billion yen compared to the same period of the previous fiscal year due primarily to decreased sales.

 

Electronic Devices

Total sales:   50.0 billion yen   (20% increase from the same quarter last year)
Operating income: 2.4 billion yen (1.7 billion yen increase from the same quarter last year)
 

The semiconductor business saw increases in both orders and sales from the same period of the previous fiscal year owing to increased demand for power modules used in industrial, consumer and railway applications.

The LCD module business saw increases in both orders and sales from the same period of the previous fiscal year due to increased demand for industrial and automotive-use products.

As a result, total sales for the segment increased by 20% compared to the same period of the previous fiscal year. Operating income increased by 1.7 billion yen compared to the same period of the previous fiscal year due primarily to an increase in sales.

 

Home Appliances

Total sales:   232.3 billion yen   (8% increase from the same quarter last year)
Operating income: 14.7 billion yen (0.5 billion yen increase from the same quarter last year)
 

The home appliances business saw an increase in sales by 8% compared to the same period of the previous fiscal year due primarily to increases in air conditioners for markets inside and outside Japan, LCD televisions and Blu-ray recorders in Japan, which experienced a last-minute surge before the termination of analog broadcasting, as well as photovoltaic systems for the Japanese market owing mainly to ongoing benefits from government subsidies.

Operating income increased by 0.5 billion yen from the same period of the previous fiscal year primarily due to increased sales.

 

Others

Total sales:   138.5 billion yen   (3% increase from the same quarter last year)
Operating income: 1.1 billion yen (0.6 billion yen increase from the same quarter last year)
 

Sales increased by 3% compared to the same period of the previous fiscal year mainly in affiliated companies involved in engineering, material procurement and logistics. Operating income showed an increase by 0.6 billion yen compared to the same period of the previous fiscal year primarily due to increased sales.

Financial Standing
The company's total assets for the fiscal quarter decreased from the end of the previous fiscal year by 88.5 billion yen to 3,244.1 billion yen. This was mainly due to credit collection resulting in a decrease of trade receivables by 119.2 billion yen and also to cash and cash equivalents decreasing by 47.4 billion yen, while inventories increased by 86.0 billion yen mainly due to variation of the balance of work-in-process as recorded in commensurate with progress in job orders under pertinent contracts.

The balance of outstanding debt and corporate bonds fell by 7.2 billion yen from the balance as of the end of the previous fiscal year to 477.1 billion yen, while the ratio of interest bearing debt to total assets was 14.7%, a 0.2-point increase compared to the end of the previous fiscal year. Trade payables decreased by 62.2 billion yen, and retirement and severance benefits increased by 6.8 billion yen.

Mitsubishi Electric Corporation shareholders' equity increased by 1.3 billion yen compared to the end of the previous fiscal year to 1,051.7 billion yen. Shareholders' equity ratio showed a 0.9-point increase compared to the end of the previous fiscal year to 32.4%. Retained earnings increased by 12.1 billion yen due to a total consolidated net income attributable to Mitsubishi Electric Corporation of 27.1 billion yen and dividend payment of 15.0 billion yen, while accumulated other comprehensive income decreased by 8.3 billion yen amidst strong yen and other factors.

Operating cash flow for this quarter decreased by 67.4 billion yen compared to the same period of the previous fiscal year to 19.2 billion yen (cash in). Investment cash flow decreased by 23.3 billion yen compared to the same period of the previous fiscal year to 31.8 billion yen (cash out), resulting from a decrease mainly in investment on securities. As a result, free cash flow totaled 12.5 billion yen (cash out). Financial cash flow was 33.8 billion yen (cash out) due to payment of dividends, repayment of loans and other factors.

Forecast for Fiscal 2012
Despite impacts from the Great East Japan Earthquake, Mitsubishi Electric's financial performance in the first half of fiscal 2012, ending September 30, 2011, is expected to exceed its previous forecast in the Industrial Automation Systems segment, which is experiencing ongoing buoyancy in demand for capital expenditures mainly in Asia, and the Home Appliances segment, which is enjoying strong sales mainly in air conditioners for markets both inside and outside Japan. The company has modified the consolidated earnings forecast for the first half of fiscal 2012, announced on June 20, 2011, as stated below. The forecast for fiscal 2012, ending March 31, 2012, has also been raised by the same amount revised for the first half of fiscal 2012.

 

First Half of Fiscal 2012 Consolidated Earnings Forecast

    Previous forecast   Revised forecast
Net sales: 1,750.0 billion yen 1,770.0 billion yen   (3% increase from the same period last year)
Operating income: 90.0 billion yen 100.0 billion yen   (11% decrease from the same period last year)

Income before
income taxes:

70.0 billion yen 80.0 billion yen   (30% decrease from the same period last year)

Net income
attributable to
Mitsubishi Electric
Corp.:

  45.0 billion yen   55.0 billion yen   (23% decrease from the same period last year)
 

Fiscal 2012 Consolidated Earnings Forecast

    Previous forecast   Revised forecast
Net sales: 3,770.0 billion yen 3,790.0 billion yen   (4% increase from the previous fiscal year)
Operating income: 230.0 billion yen 240.0 billion yen   (3% increase from the previous fiscal year)

Income before
income taxes:

200.0 billion yen 210.0 billion yen   (Unchanged from the previous fiscal year)

Net income
attributable to
Mitsubishi Electric
Corp.:

  125.0 billion yen   135.0 billion yen   (8% increase from the previous fiscal year)
 

Cautionary Statement
The expectation of operating results herein and any associated statement to be made orally with respect to the Company's current plans, estimates, strategies and beliefs and any other statements that are not historical facts are forward-looking statements. Words such as "expects", "anticipates", "plans", "believes", "scheduled", "estimated", "targeted" along with any variations of these words and similar expressions are intended to identify forward-looking statements which include but are not limited to projections of revenues, earnings, performance and production. While the statements herein are based on certain assumptions and premises that the Company trusts and considers to be reasonable under the circumstances to the date of announcement, you are requested to kindly take note that actual operating results are subject to change due to any of the factors as contemplated hereunder and/or any additional factor unforeseeable as of the date of this announcement. Such factors materially affecting the expectations expressed herein shall include but are not limited to the following:

(1)   Important trends
The Mitsubishi Electric Group's operations may be affected by trends in the global economy, social conditions, laws, tax codes, and regulations.
(2) Foreign currency exchange rates
Fluctuations in foreign currency markets may affect Mitsubishi Electric's sales of exported products and purchases of imported materials that are denominated in U.S. dollars or Euros, as well as its Asian production bases' sales of exported products and purchases of imported materials that are denominated in foreign currencies.
(3) Stock markets
A fall in stock market prices may cause Mitsubishi Electric to record devaluation losses on marketable securities, or cause an increase in retirement benefit obligations in accordance with a decline in the fair value of pension assets.
(4) Supply/demand balance for products and procurement conditions for materials and components
A decline in prices and shipments due to changes in the supply/demand balance, as well as an increase in material prices due to a worsening of material and component procurement conditions may adversely affect the Mitsubishi Electric Group's performance.
(5) Fund raising
An increase in interest rates, the yen interest rate in particular, would increase Mitsubishi Electric's interest expenses.
(6) Significant patent matters
Important patent filings, licensing, copyrights and patent-related disputes may adversely affect related businesses.
(7) Environmental legislation or relevant issues
We may incur losses or expenses owing to changes in environmental legislation or the occurrence of environmental issues. Such changes in legislation or the occurrence of environmental issues may also impact manufacturing and all corporate activities of the Mitsubishi Electric Group.
(8) Flaws or defects in products or services
We may incur losses or expenses resulting out of flaws or defects in products or services, and the lowered reputation of the quality of all our products and services may affect the entire Mitsubishi Electric group.
(9) Litigation and other legal proceedings
The Mitsubishi Electric Group's operations may be affected by lawsuits or other legal proceedings against Mitsubishi Electric, its subsidiaries and/or equity-method affiliated companies.
(10) Disruptive changes
Disruptive changes in technology, development of products using new technology, timing of production, and market introduction may adversely affect the Mitsubishi Electric Group's performance.
(11) Business restructuring
The Mitsubishi Electric Group may record losses due to restructuring measures.
(12) Natural disasters
The Mitsubishi Electric Group's operations, particularly manufacturing activities, may be affected by the occurrence of earthquakes, typhoons, tsunami, fires and other large-scale disasters.
(13) Other significant factors
The Mitsubishi Electric Group's operations may be affected by the outbreak of social or political upheaval due to terrorism, war, pandemic by new strains of influenza and other diseases, or other factors.
 

Notes
1. Change of status in material affiliates in this quarterly period: none

About Mitsubishi Electric
With 90 years of experience in providing reliable, high-quality products to both corporate clients and general consumers all over the world, Mitsubishi Electric Corporation (TOKYO:6503) is a recognized world leader in the manufacture, marketing and sales of electrical and electronic equipment used in information processing and communications, space development and satellite communications, consumer electronics, industrial technology, energy, transportation and building equipment. The company recorded consolidated group sales of 3,645.3 billion yen (US$ 43.9 billion*) in the fiscal year ended March 31, 2011. For more information visit http://www.MitsubishiElectric.com

*At an exchange rate of 83 yen to the US dollar, the rate given by the Tokyo Foreign Exchange Market on March 31, 2011

Mitsubishi Electric Corporation
Investor Relations Inquiries:
Investor Relations Group
Corporate Finance Division
Tel: +81-3-3218-2391
Cad.Irg@rk.MitsubishiElectric.co.jp
or
Media Contact:
Yurika Fujimoto
Public Relations Division
Tel: +81-3-3218-3380
prd.gnews@nk.MitsubishiElectric.co.jp
http://www.MitsubishiElectric.com/news/


© Business Wire 2011
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