Makita, the Japanese Power Tool Manufacturer, Reports Strong Q1 Performance
Makita, the renowned Japanese manufacturer of power tools, saw a significant increase in its first-quarter net profit, leading to a surge in its share prices. The company attributes this success to lower operating costs and a weakened yen.
Impressive Financial Results Propel Share Prices
Makita's shares experienced a remarkable boost, climbing by 15% to reach 4,572 yen. Earlier in the day, the shares had even peaked at an 18% increase.
Notable Profit Growth and Revenue Decline
Closing at Y11.185 billion ($78.6 million) for the quarter ending in June, Makita's net profit showed an impressive 5.9% rise compared to the previous year's Y10.56 billion. However, the company reported a 5.6% decline in first-quarter revenue, amounting to Y184.455 billion. This decrease is attributed to the impact of interest-rate increases on housing demand, especially in various regions. Revenue specifically from North America dropped by 11% to Y24.82 billion.
Factors Contributing to Bottom Line Improvement
Despite the decline in revenue, Makita managed to enhance its financial performance through various factors. The weaker yen and a reduction in selling, general, and administrative expenses played pivotal roles in boosting the company's bottom line. Moreover, costs of sales also experienced a significant decrease of 8.3%.
Optimistic Outlook for Fiscal Year 2024
Makita remains optimistic about its future prospects and is confident in maintaining its earnings forecasts for the fiscal year ending in March 2024. The company predicts an 11% decline in revenue to Y680.00 billion while expecting net profit to more than double, reaching Y33.30 billion.