© Reuters. FILE PHOTO: The logo of Nidec Corp is pictured at an earnings results news conference in Tokyo, Japan, July 25, 2018. REUTERS/Kim Kyung-Hoon/File Photo
TOKYO (Reuters) – Shares of Japan’s Nidec Corp fell as much as 7% on Wednesday morning in Tokyo after the electric motor maker nearly halved its full-year profit forecast due to a slow recovery in the auto industry. and due to the cost of promoting restructuring .
After the market close on Tuesday, the company announced a 48% cut in its operating profit forecast for the fiscal year through March to 110 billion yen ($843 million), much lower than the previous period. analysts’ expectations.
Kazuyoshi Saito, senior analyst at Iwai Cosmo Securities, said Q3 results showed the Kyoto-based company reported operating profit of 28 billion yen, down 37% from a year earlier, making it surprise investors.
“While profits are likely to return next quarter after corporate restructuring costs disappear, there is still uncertainty in macroeconomic and external conditions,” he said.
Saito added that investors will likely be looking for some evidence of the recovery the company is expecting.
Nidec faces weakening demand in the technology sector due to a downturn in the personal computer and data center markets. A company executive said on Tuesday that the bearish cycle could continue until June.
The company’s share price is down nearly 50% from the beginning of last year. Shares traded at 7,114 yen on Wednesday, down 5.8 percent on the day but still holding above a two-and-a-half year low of 6,658 yen hit on Jan.
($1 = 130.35 yen)
