Japanese trading houses — a darling of Warren Buffett’s — posted strong earnings last quarter, despite a drop in commodity prices over the period and China’s disappointing economic rebound.
The five major trading firms — Mitsubishi, Mitsui, Sumitomo, Marubeni and Itochu — all beat net-income estimates for the first quarter of the fiscal year in reports issued this week. Mitsubishi and Mitsui said they will consider additional shareholder returns depending on future results. Itochu said it will buy back up to 0.4% of shares for ¥25 billion.
"We think the strong start in the first quarter will raise expectations for a guidance hike and additional shareholder returns at first-half results,” SMBC Nikko Securities senior analyst Akira Morimoto said in a note released Tuesday after Mitsui reported.