Japanese companies that made tough decisions about exiting businesses, closing factories and revamping management led a doubling of corporate earnings last quarter to the highest level since 2007.
Net income jumped to about 5.5 trillion yen ($55 billion) at more than 1,280 of the largest listed non-financial firms, the most since a credit meltdown sparked a global recession six years ago, based on data compiled by Bloomberg. Profit climbed from 2.25 trillion yen a year ago, the fastest jump since 2010.
Companies showing profit surges include Panasonic Corp. (6752), which has cut 71,000 jobs; Mazda Motor Corp. (7261), which is shifting car production to Mexico; and Toyota Motor Corp. (7203), which overhauled management and halted new factory construction. The gains, also fueled by a weaker yen, contrast with disappointing results at firms such as Sony Corp. (6758), which resisted calls to spin off assets or close money-losing businesses.
"Companies that made efforts to cut costs and restructure before the yen started to weaken are the ones really showing growth," said Tetsuro Sugiura, chief economist at Mizuho Research Institute. "Japanese companies had fallen back in global competition because they weren't able to cut businesses and cut people or were late in doing this."
Panasonic has undergone one of the more dramatic makeovers, shifting its focus from consumer electronics to alternative power products such as solar panels and batteries. The company, once a leading television maker along with Sony and Sharp Corp. (6753), plans to stop making plasma TVs by March.
Source: NewsOnJapan
