The Wall Street Journal-20080202-IHI Corp-- Asset-Sale Proceeds Help Spur a Return to Profit

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IHI Corp.: Asset-Sale Proceeds Help Spur a Return to Profit

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Japanese shipbuilder and heavy-machinery maker IHI Corp. on Friday reported a swing to net profit for the April-to-December period, owing to proceeds from asset sales. The Tokyo-based company, which manufactures parts for engines including some used in Boeing Co. jetliners, posted a net profit of 11.22 billion yen ($105.3 million), against a year-earlier loss of 8.68 billion yen. But the swing was due in part to a special gain of 79.65 billion yen from land and other asset sales. Sales rose 12% to 858.84 billion yen. IHI's operating loss ballooned to 47.56 billion yen from 6.21 billion yen a year earlier, due to mounting costs at its energy-related, plant- engineering business. The company in September drastically cut its earnings outlook for the fiscal year ending in March because it underestimated costs at that unit. Insufficient cost controls amid stiff competition, especially on overseas construction work, also prompted the company to restate its earnings for the last fiscal year, pushing it into an operating loss. For the current fiscal year, IHI continues to forecast a group operating loss of 15 billion yen on sales of 1.320 trillion yen.