Mitsubishi Heavy Industries is forecasting a 9.6% increase in operating profit for the fiscal year ending March 2026, driven by strong demand in the defense and energy sectors. The company projects earnings to reach 420 billion yen, building on a 35.6% jump to 383.2 billion yen in the previous year. The aerospace and defense segment is expected to see a 40% rise in operating profit, while the energy systems division, which includes power generation technologies such as gas turbines, is set for a 17% increase.
The company clarified that its forecast excludes any potential positive or negative effects from changes in U.S. trade policy, particularly regarding tariffs. While acknowledging possible cost increases for imported parts used in U.S.-manufactured gas turbines, Mitsubishi Heavy aims to counteract this through price adjustments. Chief Financial Officer Hisato Kozawa emphasized that the company is taking steps to minimize any direct impact.
Chief Executive Eisaku Ito expressed concern about broader economic factors, stating that secondary effects, such as a potential economic downturn or reduced logistics volume, pose greater risks than tariffs themselves. To mitigate these risks, Mitsubishi Heavy is considering diversifying its production locations. Ito also noted that demand for the company’s power generation equipment remains robust, fueled by infrastructure growth in data centers and the trend of reshoring manufacturing to the U.S., a policy strongly supported by U.S. President Donald Trump.
For the full fiscal year 2024-25, Mitsubishi Heavy reported revenue of 5.03 trillion yen, slightly above market expectations. However, net income reached 245.4 billion yen, falling short of the consensus estimate of 267.0 billion yen. Following the earnings announcement, the company’s shares initially fell more than 7% but partially recovered to close down 5.6% on the day.
Despite the recent dip, Mitsubishi Heavy’s stock has seen significant long-term gains, with prices rising more than fivefold over the past two years. This surge coincides with Japan’s most significant post-war expansion in defense spending, under which Mitsubishi Heavy plays a key role as a producer of military jets, missiles, and naval vessels. The company remains optimistic about continued growth, particularly in sectors tied to national security and global energy infrastructure.
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