The Great East Japan Earthquake dealt a blow to Japan Inc.'s bottom line in the final quarter of fiscal 2010, muddying the nation's economic outlook, an industry report says.
The Great East Japan Earthquake dealt a blow to Japan Inc.'s bottom line in the final quarter of fiscal 2010, muddying the nation's economic outlook, an industry report says.
Across the board, pretax profits of listed companies in the January-March quarter fell by about 30 percent from the preceding three months due to repercussions from the March 11 disaster, according SMBC Nikko Securities Inc., which released an analysis compiled from earnings reports for the fiscal year ended in March.
Some 20 percent of the companies that announced year-end results did not offer earnings forecasts for the current fiscal year, which runs through March 2012, because of uncertainties created by the calamity.
The Nikko report compares results of the 831 companies listed on the first section of the Tokyo Stock Exchange that had published year-end financial statements as of May 12. The total covers 65 percent of all the first-section companies that close their books at the end of March.
Total pretax profits dropped to about 4 trillion yen in the last quarter of fiscal 2010, from about 6 trillion yen in the October-December period.
The profit figure for the first three months of this year represents a decline of more than 6 percent from the year-earlier period.
The massive earthquake and tsunami disrupted the rebound in corporate profits that began after hitting bottom in the fourth quarter of fiscal 2008, or the January-March period of 2009, when listed companies suffered a combined pretax loss amid the global economic downturn triggered by the collapse of U.S. investment bank Lehman Brothers.
Most major industries took a massive hit from the catastrophic events.
The pretax profits of companies in the land transportation sector, such as railway operators and trucking firms, plunged about 93 percent in the January-March quarter from the previous three months.
Automakers suffered a drop of some 40 percent in their collective bottom line after damage to their plants and parts shortages disrupted manufacturing operations.
Steelmakers saw their profits sink 34 percent.
The combined sales of the companies in the year through March, however, grew about 7 percent from the previous year to 406 trillion yen. The total of their pretax profits for the year rose a brisk 56 percent to 22 trillion yen.
The earnings figures for the entire year were fairly good because of strong performances in the first three quarters of the year.
Even so, the companies booked special losses totaling 3.5 trillion yen mainly due to expenses for restoring factories and stores damaged in the disaster.
A total of 206 companies didn't announce their earnings forecasts for the year to the end of March 2012, including 168 firms that did so last year, citing the difficulty of foreseeing the overall effects of the disaster and the ongoing nuclear crisis.
In particular, many leading manufacturers such as auto and electronics giants decided against announcing their earnings projections.
The 625 companies that published forecasts are looking for sales to rise about 5 percent and a slight increase in pretax profit for the year, as they expect the economy to start picking up in the second half.