Mitsubishi Heavy Projects Profit Growth on Defense Demand Despite US Tariff Uncertainty

Japan’s Mitsubishi Heavy Industries (MHI) expects a 9.6% rise in operating profit for the fiscal year ending March 2026, driven by strong demand in its defense and energy sectors. The company forecasts operating profit to reach 420 billion yen ($2.9 billion), up from 383.2 billion yen in the previous year, which marked a 35.6% increase year-on-year. However, this projection does not account for potential impacts from U.S. tariff policies, which remain a key variable.

Despite outperforming revenue expectations for the 2024-25 fiscal year with 5.02 trillion yen, MHI’s pretax profit came in at 374.5 billion yen—below the LSEG consensus estimate of 401.6 billion yen. Analysts had anticipated stronger performance across key segments.

Looking ahead, MHI anticipates its aerospace and defense segment to grow operating profit by 40% amid heightened global security concerns and increased defense spending. Its energy systems division, which includes power generation equipment such as turbines, is projected to post a 17% profit increase, supported by stable infrastructure investment and energy transition efforts.

The company highlighted that the current profit outlook excludes both positive and negative effects from ongoing U.S. tariff deliberations. Any future adjustments to trade policy could impact MHI’s export competitiveness, especially in its energy equipment business.

As global tensions and energy transitions shape industrial demand, MHI is strategically positioning itself across high-growth sectors like defense technology and power systems. With a cautious but optimistic outlook, the company continues to navigate market uncertainties while focusing on long-term growth.

Mitsubishi Heavy Industries remains a key player in Japan’s industrial sector, leveraging its diversified portfolio to sustain profitability amid shifting global trade and geopolitical dynamics.