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2013年11月 8日 (金)

企業の好決算 賃上げの実現に弾みつけたい

The Yomiuri Shimbun November 8, 2013
Positive corporate earnings must translate into higher wages
企業の好決算 賃上げの実現に弾みつけたい(11月7日付・読売社説)

Many companies are reporting good corporate earnings, backed by the tailwind created primarily by Abenomics, the economic policies of the administration of Prime Minister Shinzo Abe, which turned the hyper-appreciation of the yen into depreciation.

Companies must now take preparatory steps for future growth.

If companies with healthy earnings take the brave step of raising wages and expanding job opportunities, and household budgets sufficiently increase, corporate performance will improve even further. Bringing about such a virtuous cycle would guarantee a self-sustaining business recovery led by private sector demand.

Announcements are in full swing now of the interim consolidated settlements of accounts for the first half for fiscal 2013 for companies listed on the First Section of the Tokyo Stock Exchange.

About 60 percent of the companies reported increases in both revenue and profits, with many companies reporting record profits. About 30 percent of the firms revised upward their earnings outlooks for the entire business year ending March 2014.

The Japanese economy has faced such headwinds over the last several years as the collapse of the Lehman Brothers shock, the Great East Japan Earthquake and the hyper-appreciation of the yen.

However, a number of factors have since pushed up corporate income, including a round of corporate restructuring and other necessary structural reform measures, as well as the depreciation of the yen, higher stock prices and recovery in personal consumption brought about by Abenomics. The business recovery in the United States also helped increase corporate income.

We can safely say now is the turning point for major corporations to escape their weak performances.

The prime examples are export-oriented industries that fully utilized the advantages of the yen’s depreciation.

Riding the wave

Toyota Motor Corp. has massively increased its profit due to healthy sales of hybrid vehicles in North America and elsewhere. It forecasts an operating profit of ¥2.2 trillion for the current business year, recovering to the ¥2 trillion level for the first time in six years.

Honda Motor Co., which is strong in the eco-cars currently popular among drivers, also made good earnings, while companies like leading minivehicle maker Suzuki Motor Corp. recorded their largest profits ever.

In the electronics industry, Panasonic Corp., which suffered from huge deficits for two consecutive years, returned to the black in a V-shaped recovery. The company beefed up its competitive sectors, withdrew from the deficit-ridden plasma display TV business, and took a scrap-and-build approach to unprofitable businesses. The effects of such reform measures are apparently being seen.

However, some export-oriented companies continue to face hardships as they cannot ride the wave of recovery.

Nissan Motor Co.’s business expansion strategy is spinning its wheels. Although it counted on rapid growth in emerging economies such as Russia and Brazil, it was unable to get the results it expected from such countries. Sony Corp. saw poor sales in liquid crystal display TVs and digital cameras, largely affected by the business slump in emerging countries.

The companies need to accurately grasp growth markets and concentrate their management resources in such markets and decide how to sell strategic commodities. The “selection and concentration” strategy in businesses is now increasingly vital.

Among companies fueled by domestic demand, East Japan Railway Co. and Oriental Land Co., the operator of Tokyo Disney Resort in Urayasu, Chiba Prefecture, achieved positive earnings, but retailing businesses in general were unable to increase their earnings to a satisfactory extent, revealing the gap in earning capability between them.

There is concern regarding the future of the economies in emerging countries, as well as anxiety over possible further increases in electricity rates due to the delay in reactivating idle nuclear reactors. No company should let its guard down in the days to come. It is indispensable for them to reinforce their business strategies from both offensive and defensive standpoints.

(From The Yomiuri Shimbun, Nov. 7, 2013)
(2013年11月7日01時36分  読売新聞)


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