(Bloomberg) -- Mitsubishi Heavy Industries Ltd. posted quarterly net income that fell short of analysts’ projections due to a drop in defense orders, even as revenue continues to climb for core businesses.
Shares in the manufacturer fell 2.5% after it reported that net income for the July-September period was ¥44.8 billion ($294 million), compared with analysts’ average estimate for ¥67.5 billion. Revenue was ¥1.19 trillion, exceeding the prediction for ¥1.17 trillion.
The company’s shares have more than doubled this year, thanks to investors’ high expectations over Mitsubishi Heavy’s energy and defense businesses. With energy and defense as pillars of its mid-term plan, it aims to boost revenue in those segments by ¥1 trillion before the end of the 2026 fiscal year.
“Currency fluctuations and inflation make the future unpredictable, but strong order intakes are encouraging,” Seiji Izumisawa, chief executive officer, said at a briefing.
The aircraft, defense and space segment saw a ¥197 billion decline during the first half of the current fiscal year, due to an exceptionally large volume of orders last year during the same period.
Business profit, which doesn’t account for manufacturing and sales expenses, rose 87% to ¥188 billion during the six months through end-September. It kept its full-year profit guidance for ¥350 billion and raised its order intake forecast to ¥6 trillion, which is 10% lower than last year.
Mitsubishi Heavy saw orders increase for gas turbine engines and steel-making machinery, while profit rose in its energy, defense and space units.
Japan’s defense ministry has awarded a ¥56 billion contract to Mitsubishi Heavy to develop a glide phase interceptor, a missile defense system designed to take down hypersonic weapons, the government said Friday.
The Tokyo-based heavy machinery maker holds the biggest share in the global market for gas turbine engines. It’s also one of the lead contractors in a trilateral partnership between Japan, Italy and the UK to build a next-generation stealth fighter jet.
(Corrects segments mentioned in the seventh paragraph.)
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