Toyota’s situation isn’t much better as its revenues fell by 2.2% during 2012. Its profit margin is also low but stable at 2%. Nearly 75% of the company’s revenues are from aboard with North America leading the board at 28%. So from the revenues stand point, for a every 1% drop in the Japanese yen against other currencies, may lead, assuming all things equal, to a 0.75% rise in its revenues.
Toshiba also hasn’t performed well in 2012 and its net sales in the first nine months of 2012 declined by 7.1%. Since this company’s international revenues account for 56% of the total net sales, a drop in Japanese currency by 10%, assuming all things equal, will lead to a gain of 5.6% in total revenues, or another $2.5 billion gain in sales. This won’t compensate for the company’s drop in revenues, but might curb its fall.
Japan Tobacco International is another leading Japanese company, but its situation is much better than the Japanese companies listed above. This company’s revenues grew by nearly 4.7% in 2012 and its operating profit margin is set at 14%. Since this company’s international revenues account for nearly 38% of its total revenues, for every 10% drop in Japanese yen, assuming all things equal, the total revenues of Japan Tobacco will rise by 3.8%. This company’s stock, much like Sony’s, has also taken off in 2013 as it spiked by 20.5%.
Some of the companies I have listed above may not be the best investment available, but should bring to mind that if the macroeconomic condition in Japan will lead to the devaluation of the Japanese yen, this could also raise these companies’ revenues, which will likely to reflect in their stock price.
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The author holds no positions in stocks mentioned and does not plan to initiate positions within 120 hours of the posting of this article. This article is to be used for educational, research and informational purposes only and does not constitute investment advice. There are no guarantees, expressed or implied, of future positive returns in regards to the subject matter contained herein. Understand the risks inherent in investing before making the decision to invest or consult an investment professional for more information. Reasonable due diligence has been performed in regards to the information in this article. However, the author expressly disclaims any liability for accidental omissions of information or errors in fact.
The article Is it Time to Become Big in Japan? originally appeared on Fool.com and is written by Lior Cohen.
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