Mitsubishi Electric Corporation announced its financial results for the first quarter ending June 30, 2006, of the current fiscal year ending March 31, 2007. Management conditions during the first quarter of fiscal 2007 saw a continued trend of underlying strength in the global economy. In terms of the Japanese economy, which has recently evidenced outgrowing sense of breaking away from its deflationary slump, it showed steady and active demand in capital expenditures.
First quarter net sales grew 11 percent compared to the same period of the previous fiscal year to 821.5 billion yen (approx. U.S. $7.2 billion). There were increases in the Energy and Electric Systems, Industrial Automation Systems, Information and Communication Systems, as well as the Electronic Devices segments.
Operating income increased 94 percent from the same period of the previous fiscal year to 40.5 billion yen (approx. $352.8 million). This is mainly due to the increases in profits of the Industrial Automation Systems and Electronic Devices segments, as well as the return to profitability of the Energy and Electric Systems and Information and Communication Systems segments.
The telecommunications equipment business saw increases in both orders and sales compared to the same period of the previous fiscal year, due to increases in the third-generation mobile handsets for domestic distribution and optical broadband access system products. The sales of the information systems and service business were unchanged from the same period of the previous fiscal year, mainly due to increases in the IT infrastructure service business despite certain decreases in the office server business. The electronic system business saw increases in space system business, and both orders and sales increased. As a result, total sales for this segment showed an increase of 30 percent compared to the same period of the previous fiscal year. Operating income improved 11.2 billion yen (approx. $97.5 million) due to increases in sales, returning to profitability.
The liquid crystal business saw increases in small and medium sized products mainly for industrial use, and both orders and sales increased from the same period of the previous fiscal year. As a result, total sales for the electronic devices segment increased by 16 percent compared to the same period of the previous fiscal year. Operating income increased 0.8 billion yen (approx. $6.9 million), due to increases in sales.
The home appliance business saw a decrease in sales of 3 percent compared to the same period of the previous fiscal year. Despite increases in sales of electric hot water supply systems and induction heating cooking systems for use in all-electric-powered homes as well as solar power generation systems, sales decreased in air conditioners for the domestic market, refrigerators and DVDs. Operating income also decreased 8.3 billion yen (approx. $72.3 million) due to a decline in prices.
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