Makita and Furuno Electric, both with high overseas sales ratios, are expected to see earnings growth from the weaker yen. The main factors cited are the effects of promotional activity in North America and contributions from the European and Chinese markets.
Makita, which operates primarily in Northeast Asia, derives approximately 80% of its sales from overseas. Sales rose sharply as a result of intensified promotions at home-improvement stores in North America and the tailwind from the weaker yen. First-quarter operating profit was 28% of the full-year target, indicating solid progress. Although the full-year forecast remains unchanged, the weaker yen could continue to boost earnings, and an upward revision to the earnings outlook from the second quarter onward is being discussed.
Meanwhile, Furuno Electric's first-quarter operating profit rose 65% year on year to ¥5.7 billion, representing strong progress against its first-half plan. The weaker yen's currency effect in Europe contributed to earnings, while sales of marine radar and other products expanded in the marine equipment business. Increased equipment sales in China, together with higher sales of ETC in-vehicle units and defense equipment, also supported earnings, while the full-year forecast remains unchanged.
This trend, like the positioning of these companies as beneficiaries of the weaker yen in a feature article in Diamond Zai, indicates that strengthening overseas distribution channels is attracting attention as a growth driver for Japanese stocks amid the current market environment.