U.S. News

Mitsubishi First-Quarter Profit Dips 7.3%


Mitsubishi Corp., Japan's biggest trading house, on Tuesday reported a 7.3% fall in quarterly profit, hit by lower coking coal prices, and kept its forecast for profit to fall for the first time in five years.

Other top trading companies besides Mitsubishi are expected to ring up record profits this business year as oil and metal prices are seen staying above their conservative assumed prices, while profits are expanding in non-energy businesses such as power generation, infrastructure projects and auto sales.

Mitsubishi, a big supplier of coking coal used in steel production, copper and liquid natural gas (LNG) on the world market, said its group net profit came to 115.3 billion yen ($969.4 million) in the April-June first quarter.

That beat Merrill Lynch's estimate for a profit of 106.8 billion yen and compared to a 124.43 billion yen profit in the same quarter a year earlier, when the sale of shares in Diamond City boosted its bottom line.

Mitsubishi reiterated its forecast for net profit to fall 4% to 400 billion yen in the year to March 2008. Analysts are a bit more optimistic -- the average of 14 polled by Reuters Estimates calls for a profit of 415 billion yen.

Japanese trading companies have been boosting profits since the early 2000s, helped by spikes in oil and other commodities prices, the source of up to 65% of their profit.

Mitsubishi's stock rose 18% during the first quarter. The Nikkei 225 Average rose 5%.