IHI Net Income Outlook Misses Analyst Estimates; Shares Dropby and
Absence of additional costs will boost earnings, IHI says
Company's shares fall the most in more than one week
IHI Corp. predicted profit will rise this year in the absence of costs that the Japanese maker of engines, bridges and ships previously booked for project delays. The shares fell after the outlook missed analyst estimates.
Net income will climb to 30 billion yen ($276 million) in the year ending March 31, from 1.53 billion yen in the previous 12-month period, Tokyo-based IHI said Tuesday. Analysts projected 34 billion yen, according to the average of 13 estimates compiled by Bloomberg. Sales will probably increase to 1.6 trillion yen from 1.54 trillion yen, it said, against analyst estimates of 1.57 trillion yen.
The company will step up production of engine parts this fiscal year for Airbus Group SE’s new A320neo, which was first delivered in January, Mikio Mochizuki, a managing executive officer at IHI told reporters Tuesday in Tokyo. The company booked costs last fiscal year for a delay in a Turkey bridge contract and for a Norway floating production, storage and offloading vessel project.
IHI dropped 3.3 percent to close at 237 yen, the largest decline since April 28.
The maker of engines for Japan’s first stealth jet got 30 percent of sales from its aero-engine and space division, its largest unit, in the year ended March 2015. IHI also makes ships, bridges, liquefied natural gas facilities, as well as parts for power stations.
Full-year operating profit will climb to 65 billion yen, in line with analyst estimates. The company said its forecasts are based on a foreign-exchange outlook of 110 yen to the dollar and 125 yen to the euro.