KAWASAKI PROFITS UP
March 7 2006. 
Kawasaki Heavy Industries Ltd.  is likely to post a group operating profit of nearly 31 billion yen for the fiscal year through March 31, a gain of 30%, company sources said Monday.
The heavy electric machinery company had initially projected a profit of 28 billion yen.
The driving force behind the result is the firm's key machinery division, which saw motorcycle sales climb in the U.S. and Europe in particular. Coupled with the full-scale launch of new motorcycle models through the end of the fiscal year, shipments of industrial robots will also increase in light of a turnaround in capital spending by the private sector. As a result, the division's operating profit is expected to be on par with fiscal 2004 at roughly 17 billion yen, some 3 million more than originally forecast.
Last fiscal year's advertising costs for new gas turbines, which put the squeeze on bottom lines, were no longer an issue for the gas turbine and machinery unit. And due to solid production of aircraft engines, operating profit at the division will likely more than double.
In addition to improved sales of hydraulic equipment for construction machinery, the shipbuilding unit, which continues to sell unprofitable ships, will probably log a smaller-than-anticipated loss.
But the plant and infrastructure engineering division will probably fall short of targets. An estimated operating loss of over 10 billion yen will put the squeeze on Kawasaki Heavy's profits, but this will be offset by the strong-performing machinery division.
Sales are also likely to top original estimates of 1.3 trillion yen. The weak yen has also underpinned the figures.
For the fiscal year through March 31, 2007, the company anticipates sales to edge up slightly to 1.35 trillion yen and operating profit to leap 20% to nearly 40 billion yen.
The shipbuilding division, which will continue to sell unprofitable ships, will probably see earnings fall, but bottom lines will be boosted by sales of new motorcycle models at the machinery division.
Meanwhile, the plant and infrastructure engineering division, which will dispose of losses ahead of schedule, is also forecast to see a considerable improvement in performance.

Source: The Nihon Keizai Shimbun Tuesday morning edition