TOKYO, Nov 27 (Reuters) Sanyo Electric Co Ltd said its operating profit rose 50 percent in the fiscal first half on brisk battery and digital camera demand, and the electronics maker raised its annual outlook to above market expectations.
Sanyo, which is restructuring with the help of shareholder Goldman Sachs, said on Tuesday it aims for an operating profit of more than 100 billion yen in 2010/11, as it focuses resources on solar cells and rechargeable batteries.
Unveiling its turnaround strategy, Sanyo, which posted a net loss for the three business years through March, said it plans 350 billion yen in capital spending in the three years to March 2011, of which 70 percent would go to its batteries, solar cells and electronic components.
Sanyo is the world's largest rechargeable battery maker, and its lithium-ion batteries are used in four of every 10 mobile phones in the world. Rivals include Sony Corp and Matsushita Electric Industrial Co Ltd For the year to March 2008, Sanyo revised up its operating profit forecast to 50 billion yen from 45 billion yen. The latest outlook compares with a 49.57 billion yen profit a year earlier, and exceeds a consensus of 47.96 billion yen in a poll of nine analysts.
Sanyo stuck to its net profit forecast of 20 billion yen for the current business year, swinging from a net loss of 45.36 billion yen a year earlier.
Sanyo's bottom line was hit hard in recent years by hefty costs to cut thousands of jobs, steep price falls and earthquake damage to its microchip plant.
Following the announcement, shares in Sanyo were up 5.7 percent at 187 yen in late afternoon, outperforming the Tokyo stock market's electrical machinery index IELEC, which rose 0.5 percent.
Operating profit came to 23.81 billion yen in April-September, up from a 15.84 billion yen profit a year earlier. Net profit was 15.98 billion yen, compared with a loss of 3.62 billion yen a year ago.
Like its larger rivals Sony and Canon Inc, the Osaka-based company benefitted from robust global demand for digital cameras.
Sanyo also enjoyed strong sales of lithium-ion batteries used in laptop PCs and mobile phones.
Sanyo shares gained 17.2 percent from the start of the year through Monday, while the sub-index was down 10.7 percent.
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