Combined profit at firms off 73%

Kyodo

The combined profit of Japanese companies in the October-December quarter plunged 73.0 percent from a year earlier, contrasting with a 14.5 percent decline for European companies and a 9.4 percent gain for U.S. companies, according to a recent report by Nomura Securities Co.

The brokerage attributed the drop in combined profit at 400 major Japanese companies to six factors — the yen’s appreciation, power shortages, high corporate tax, delayed trade liberalization, tough labor regulations and global warming measures.

The combined profit of the Japanese companies fell 26.2 percent year-on-year in the April-June quarter and 36.9 percent in the July-September quarter, but the drop in the October-December period was even sharper than that for European companies struggling amid the eurozone sovereign debt crisis.

“Japanese companies may record net profit in the January-March quarter this year against their net loss a year earlier on the March 2011 quake and tsunami,” said Hisao Matsuura at Nomura Securities. “But how to address the six adverse factors will be the problem.”

The net profit fall for 312 major European firms was calculated by Kyodo News based on data from New York-based Thomson Reuters. Thomson Reuters estimated that the combined net profit of 461 major U.S. companies grew, finding they may have posted the single-digit profit growth in the October-December quarter after maintaining double-digit growth for eight quarters.

Their profit growth is expected to decelerate further to 2.1 percent in the first quarter of this year.