Denso (6902) FY17 Q1 Results Comment – Cost Cutting Commences

Key Points  FY17 Q1 OP was around 15% (¥17bn) above plan according to management – ¥9bn from higher sales and ¥8bn from cost reduction.  Q2 guidance assumes the ¥8bn cost reduction savings achieved in Q1 will be needed for other expenses, which sounds unlikely.  Management seems confident H1 OP will come above the newly revised guidance (H1 OP raised 15%, full-year OP 8%, implying H2 OP raised 3%) thanks to the strong sales environment.  Guidance upgrade mainly based on improvement in the ...