 Bloomberg.com reported that shares of Asahi Glass Co., the world's third-largest glassmaker, rose by the most in six weeks after the company said writing off U.S. assets and exiting an unprofitable unit in China will boost earnings from next year.
The stock climbed 64 yen, or 4.7 percent, to 1,422 yen on the Tokyo Stock Exchange, the highest closing price since Oct. 26. It had the ninth-sharpest increase of the 1,706 companies in Japan's Topix index.
Morgan Stanley, the world's second-largest securities firm, said the U.S. write-off and disposal in China will increase next year's earnings at Asahi Glass and bring the company closer to a mid-term profit target. The measures will cost 75 billion yen this year and come as prices rise for raw-materials and demand shrinks for cathode-ray tubes, known as CRTs, used in televisions.
``Measures are being taken to bring about much-needed structural reform of CRT glass and North American flat glass,'' Lalita Gupta, an analyst at Morgan Stanley with an ``equal- weight'' rating on Asahi Glass, said in a research note.
The 75 billion yen in losses led Asahi Glass to cut its forecast for profit this year by almost half, to 41 billion yen from a previous target of 76 billion yen, the company said yesterday after the Tokyo stock exchange closed.
It's writing off 40 billion yen from its Tennessee-based AFG Industries Inc. unit at once instead of spreading the charge over the next seven years, Asahi Glass said. AFG, North America's largest supplier of glass for buildings, was acquired by the Japanese company in several steps beginning in 1988.
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