MHI's Fiscal 2017 Profit Drops on Writedowns, but its Guidance Disappo...

We lower our fair value estimate on Mitsubishi Heavy Industries, or MHI, to JPY 4,900 from JPY 5,100 as we factor in further headwinds to profit from sluggish power sales, slower progress in translating cost cuts to margin expansion, and prolonged Mitsubishi Regional Jet, or MRJ, development-related losses. MHI's net profit fell in fiscal 2017 (financial year ending March 2018) to JPY 70 billion was well short of guidance of JPY 80 billion and our forecast of JPY 89 billion. While some of this w...