July 29 (Bloomberg) -- Komatsu Ltd., the world’s second-biggest maker of construction equipment, posted a 1.1 percent gain in first-quarter profit as sales in Europe, Africa and parts of Asia helped overcome a slump in China.
Net income rose to 37.7 billion yen ($370 million) in the three months ended June 30, from 37.3 billion yen a year ago, the Tokyo-based company said today in a statement. Revenue also rose 1.1 percent to 460.2 billion yen.
Sales of construction, mining and utility equipment, Komatsu’s biggest business segment, were strongest in Europe where they rose 31 percent. Asia outside Japan and China, Latin America, the Middle East and Africa also posted gains.
In Europe, “demand for construction equipment gradually recovered, centering on the major markets of Germany, France and the United Kingdom, as European economies came out of prolonged stagnation affected by the Eurozone crisis,” according to the statement.
Sales were partly depressed by construction project delays in China where building equipment sales fell 15 percent in the quarter. A slowdown in China could threaten to undermine the appetite of commodity suppliers to invest in new gear, Komatsu Chief Executive Officer Tetsuji Ohashi said last month.
Caterpillar Inc., the largest maker of mining machinery, last week forecast full-year sales and earnings that fell short of analysts’ estimates. The outlook came as the Peoria, Illinois-based company said it doesn’t see any sign of an upturn in the industry this year. Caterpillar’s second-quarter Asia-Pacific sales fell 14 percent, the company said.
Hitachi Construction Machinery Co., Japan’s second-biggest building equipment maker, today cut its profit forecast by a third to 30 billion yen for the year to March 31, citing a shortfall in China demand and in some other Asian countries.
Overall, operating profit at Komatsu rose 21 percent to 63.5 billion yen, as higher product prices and a weaker yen compensated for lower volumes. The Japanese company maintained its full-year outlook for net income of 154 billion yen.
“Sales of new equipment in China and mining machinery parts are forecast to miss our estimates,” Akira Sugiki, a senior executive officer at Komatsu, told analysts and investors today in Tokyo. “Sales from some regions such as Europe and Africa are stronger than we anticipated and are set to exceed our estimates,” he said.
Komatsu rose 1.6 percent to 2,350.5 yen at the 3 p.m. close of trading in Tokyo before earnings were released, extending this year’s gain to 10 percent.
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