NAGOYA, Japan — Denso Corp., a major supplier to Toyota, said on Tuesday it expects operating profit in the financial year that began this month to fall from the prior year, citing uncertainty over the Middle East and higher investment spending.
The world’s second-largest auto parts supplier forecast operating profit of 500 billion yen ($3.13 billion) for the year ending March 2027, down 9.5 percent from 552.5 billion yen a year earlier.
Separately, Denso said it had pulled out its buyout offer for Rohm Semiconductor, estimated by the media to be as much as $8.3 billion, after failing to secure the chipmaker’s support for a proposal that would have expanded its control over power-management chips used in electric vehicles and data centers.
Rohm, which has strengths in silicon carbide power semiconductors with high energy efficiency, said last month it had begun talks with Toshiba and Mitsubishi Electric on integrating their power semiconductor business.
Denso shares slumped 4.3 percent on Tuesday, compared to a 0.5 percent drop in the main Nikkei 225 index. Rohm shares were up 0.7 percent.
Denso’s weaker full-year outlook comes despite a strong finish to the past financial year, which saw it post a 50 percent jump in fourth-quarter operating profit as higher production volumes offset rising tariff, parts and material costs.
Operating profit for the three months ended March totaled 176.6 billion yen, beating a median forecast of 171.3 billion yen in an LSEG survey of eight analysts and up from 117.4 billion yen a year earlier.
Denso generates more than half of its revenue from Toyota group companies. reuters