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Boeing Supplier Resumes 787 Cell Output, Forecasts Profit Jump

May 09, 2013

Boeing Supplier Resumes 787 Cell Output, Forecasts Profit Jump

The newly redesigned battery for Boeing Co.'s 787 Dreamliner, left, and a battery charger are displayed in an All Nippon Airways Co. (ANA) hanger at Haneda Airport in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg

GS Yuasa Corp. (6674), a Japanese battery maker, forecast net income will jump 73 percent this fiscal year and said it resumed output of cells for Boeing Co. (BA:US)’s 787.

Production of the batteries was restarted last month after being halted in January, Makoto Yoda, president of the company, told reporters today in Kyoto, Japan. GS Yuasa had stopped making the batteries after some overheated, leading to the grounding of 787s as a safety precaution.

The company, which also sells lead-acid batteries for cars, is aiming to make lithium-ion units a key business, from about 7 percent of sales in the year ended March 2012. ANA Holdings Inc. (9202) and Japan Airlines Co. (9201), the two biggest operators of the 787 Dreamliners, plan to restart commercial services with the planes next month after test flights with upgraded batteries.

“Probably in a year or so people will forget about” the aircraft battery overheating, Edwin Merner, president of Atlantis Investment Research Corp. in Tokyo, said before today’s announcement.

Net income will rise to 10 billion yen ($101 million) in the year ending March 31, compared with 5.8 billion yen in the previous 12 months, GS Yuasa said in a statement today. That target missed the 11.8 billion yen average of nine analysts’ estimates compiled by Bloomberg.

Profit slumped 51 percent in the year ended March, as weaker demand for electric car batteries lead to a 3.8 percent drop in sales, Yoda said.

Yuasa makes lithium-ion batteries for Mitsubishi Motors Corp. (7211), through a venture with the carmaker and Mitsubishi Corp. (8058) Tokyo-based Mitsubishi Motors put its plug-in hybrid Outlander on sale in Japan on Jan. 24 and had sold 4,305 of the model as of the end of March, according to the company.

To contact the reporters on this story: Chris Cooper in Tokyo at ccooper1@bloomberg.net; Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net

To contact the editor responsible for this story: Vipin V. Nair at vnair12@bloomberg.net


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