TOKYO: Shares in Japan’s Nidec Corp fell as much as 7 percent in Tokyo on Wednesday morning after the electric motor maker nearly halved its full-year profit forecast amid a slow auto industry recovery and restructuring costs.
After markets closed on Tuesday, the company announced a 48 percent cut in operating profit for the fiscal year through March to 110 billion yen ($843 million), well below analyst expectations.
The third-quarter result, in which the Kyoto-based company reported operating profit of yen 28 billion, down 37 percent from a year earlier, surprised investors negatively, said Kazuyoshi Saito, senior analyst at Iwai Cosmo. Securities.
“While profitability is likely to return next quarter after the company’s restructuring costs have subsided, there is uncertainty in the external and macroeconomic environment,” he said.
Investors were likely looking for any evidence of the recovery the company expects, Saito added.
Nidec is facing declining demand in the technology sector due to a downturn in the PC and data center market. A company executive said on Tuesday that the downward cycle could continue until June.
The company’s share price is down nearly 50 percent from the beginning of last year. Shares traded at 7,114 yen on Wednesday, down 5.8 percent last day, but still above the 2-1/2-year low of 6,658 yen on Jan. 4.
($1 = 130.35 yen)