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(From Journal of Japanese Trade & Industry (JJTI))
Major Japanese companies posted record-high earnings for the six months to Sept. 30, 2003, surpassing those marked in the same half-year period of 2000, when the Japanese economy was booming with robust information technology investment.
According to a report released by the Shinko Research Institute Co. on Nov. 17, the combined group pretax profits of 434 leading firms rose 14.2% in the April-September period from a year earlier to \6,819.5 billion. The 434 companies represent about 40% of the firms listed on the Tokyo Stock Exchange's prestigious First Section, excluding financial institutions and insurers.
The combined increase of \850 billion in the firms' pretax profits during the reporting period roughly corresponds to their combined fixed cost cutback of \900 billion. With their combined revenues rising only 1.7%, the latest figures show that companies boosted earnings mainly by taking cost-cutting measures such as job cuts and business restructuring. In other words, the companies have now become "lean and mean" or competitive enough to secure profits even if their sales do not grow greatly in the wake of ...