Major firms` pretax profits expected to fall 37% in FY 2008

TOKYO, Feb. 1 Kyodo -
Total pretax profits of major nonfinancial companies for fiscal 2008 ending in
March are expected to fall 37.3 percent from the previous year in the economic
downturn sparked by the global financial turmoil, according to a recent survey
by a private research institute.
The expected fall compares with the 24.5 percent decline forecast when the
companies had reported their interim earnings for the current business year and
means their pretax profits will fall by more than 12 trillion yen in value from
the previous year, the Shinko Research Institute said.
The anticipated profit fall will be the first in seven years in a turnaround
from record-high profits in fiscal 2007. Total sales of such firms are expected
to decline 1.0 percent from the previous year.
The institute conducted the survey on the latest earnings forecasts as of last
Thursday released by 1,127 nonfinancial companies listed on the First Section
of the Tokyo Stock Exchange.
Export-oriented companies such as Toyota Motor Corp. and Sony Corp. have
forecast losses for the current fiscal year due to the yen's appreciation as
well as the slowing economy.
As such companies are also expected to further revise downward their earnings
for the fiscal year, the expected fall in the total pretax profits is likely to
become larger.
The expected fall is roughly at the same level as the 37.4 percent fall logged
in fiscal 2001 when the economy was hit by the collapse of the
information-technology bubble.
As of last Thursday, 94 of 178 companies which have reported their earnings
results for the April-December period, the first nine months of fiscal 2008,
have revised downward their earnings forecasts for the current business year.
Tomohiro Inagaki, an analyst at Shinko Research Institute, said many companies
had expected business recovery in the latter half of fiscal 2008 but the
economy has fallen back faster than expected.
==Kyodo