DENSO Announces First-Quarter Financial Results

Net sales and operating income decrease for the first time since quarterly results reporting began in FY2003

KARIYA, Japan, July 30 -- DENSO Corporation today announced global financial results for the first quarter ended June 30, 2008:

-- Consolidated net sales totaled 983.9 billion yen (US$9.2 billion), a slight decrease from the previous year.

-- Consolidated operating income totaled 74.2 billion yen (US$696.8 million), a 20.6 percent decrease from the previous year.

-- Consolidated net income totaled 51.7 billion yen (US$485.4 million), a 23.3 percent decrease from the previous year.

"Sales decreased mainly due to the decrease in car production in North America and substantial currency exchange loss, despite increases in the export of vehicles to emerging countries and car production for Japanese auto manufacturers in ASEAN countries and China," said Sadahiro Usui, managing officer of DENSO Corporation. "A decrease in sales and substantial currency exchange loss led to a decrease in operating income."

In Japan, sales totaled 650.7 billion yen (US$6.1 billion), a 0.5 percent increase from the previous year. Despite a sales increase led by the growing export of vehicles and cost reduction efforts, substantial currency exchange loss and rising raw materials costs led to operating income of 31.4 billion yen (US$295.0 million), a 40.6 percent decrease from the previous year.

In North, Central and South America, a decrease in sales mainly to the three major American automakers, resulting from the slowdown in car production in North America, led to a decrease in sales to 190.9 billion yen (US$1.8 billion), a 15.2 percent decrease from the previous year. Operating income decreased to 10.8 billion yen (US$101.6 million), a decrease of 23.7 percent from the previous year. The decline in production volume and currency exchange loss resulted in the decrease in operating income.

In Europe, sales totaled 163.9 billion yen (US$1.5 billion), a 4.4 percent increase from the previous year. Operating income totaled 7.0 billion yen (US$65.6 million), a 7.3 percent increase from the previous year. The sales expansion to Fiat and other automakers for air conditioning systems contributed to the increase in sales and operating income.

In Asia and Oceania, sales totaled 152.2 billion yen (US$1.4 billion), a 3.3 percent increase from the previous year, due to continued growth in car production volume for Japanese auto manufacturers in ASEAN countries and China. Operating income totaled 23.1 billion yen (US$217.3 million), a 24.5 percent increase from the previous year. In addition to an increase in production volume of air conditioning systems to Toyota, and diesel common rail systems to Isuzu and Mitsubishi in Thailand, the stable expansion of China operations resulted in an increase in operating income.

"Considering the severe business environment, including the trend of decreases in car production in North America and rising raw materials costs in the second quarter, we have revised the half-year forecast for the fiscal year ending March 31, 2009," said Usui. "We have also reflected the changes in the half-year forecasts to our full-year forecasts."