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Sanyo Is Likely to Beat Profit Forecast: Nikkei

Japanese electronics maker Sanyo Electric is likely to report a 19 percent rise in its 2007/08 operating profit, beating its own projection by 4 billion yen (US$39 million), the Nikkei newspaper reported on Wednesday.

Such a result would underscore a nascent recovery for Sanyo, which is restructuring with the help of shareholder Goldman Sachs after its bottom line was hit hard by hefty costs to cut thousands of jobs, steep price falls and damage from an earthquake to its microchip plant.

The report sent shares in the company up as much as 8.3 percent.

Sanyo has been focusing its resources on solar cells and rechargeable batteries, its cash cow operations, allocating 70 percent of its planned capital spending in the next three years to the battery business and electronic parts.

The Nikkei said strong sales of such batteries had likely helped Sanyo reach a group operating profit of about 59 billion yen for the year ended March.

The figure is in line with a forecast for a 60 billion yen profit in a poll of nine analysts by Reuters Estimates.

Sanyo's net profit is also expected to beat its own projection slightly, at more than 20 billion yen, the paper said. The company had forecast a 2007/08 net profit of 20 billion yen, swinging from a net loss of 45.36 billion yen a year earlier.

That would mark the company's first net profit in four years.

The company's digital camera business was also strong and likely shipped a record 15 million units, helping its consumer electronics division return to profitability, the paper added.

The Nikkei also said the company is expected to log 2007/08 sales of 2.24 trillion yen, up 1 percent year-on-year.

Sanyo said in a statement the figures were based on the newspaper's speculation.