Topix in Third Weekly Advance; Nikon and Suzuki Fall on Outlook

Hiruki Nakamura
06 Feb, 2015
New York City

Earnings were in focus in Tokyo trading and Topix index extended the advance for the third week in a row. Nikon and Suzuki fell after estimating weaker-than-expected outlook. Olympus Corp sales gained more than 7%. Takata, the troubled air bags maker loss was smaller than estimated.

[R]4:30 PM Tokyo – Earnings were in focus in Tokyo trading and Topix index extended the advance for the third week in a row. Nikon and Suzuki fell after estimating weaker-than-expected outlook. Olympus Corp sales gained more than 7%. Takata, the troubled air bags maker loss was smaller than estimated.[/R]

Stocks in Tokyo closed higher and Topix index closed up for the third week in a row after corporate earnings were weak but still ahead of estimates.

Companies releasing earnings so far in the quarter have shown slight improvement in the outlook and benefitted from the weakening yen. However the lift in earnings from the currency depreciation has not been as strong as many analysts had estimated.

Nikon and Suzuki fell more than 5% after two companies estimated sharply lower annual net income despite the recent weakness in the yen.

The Nikkei 225 Stock Average increased 143.88 or 0.8% to 17,648.50 and the broader Topix index gained 7.08 to 1,417.19.

For the week, Nikkei 225 edged down 0.2%.

The yen closed edged up at 117.34 against one dollar.

Stocks in Review

Nikon Corporation plunged 5.5% to 1,467 after the digital camera maker reported net sales in the nine-month period ending in December declined 15.7% to 617.82 billion yen from 732.48 billion yen a year ago period.

Net income in the quarter tumbled 55.4% to 16.73 billion yen compared to 37.51 billion yen and diluted earnings per share dropped to 42.10 yen from 94.41 yen in the same period a year ago.

The camera maker forecasted net sales for the year to decrease 4.4% to 860 billion yen from earlier estimate of 900 billion yen and net income to plummet 47.4% 20 billion yen compared to previous guidance of 38 billion yen.

Olympus Corp jumped 2.7% to 4,125 yen after the medical and industrial microscope maker said net sales in the nine-month period ending in December soared 7.1% to 550.01 billion yen from 513.67 billion yen a year ago period.

Net income in the quarter surged 446.4% to 31.93 billion yen compared to 5.84 billion yen and diluted earnings per share climbed to 93.27 yen from 17.78 yen in the same period a year ago.

The company forecasted net sales for the year to jump 6.5% to 760 billion yen and net income to jump 230.2% to 45 billion yen.

Suzuki Motor Corp declined 5.8% to 3,439.50 yen after the automaker reported sales in the nine-month period ending in December jumped 3.2% to 2.14 trillion yen from 2.08 trillion yen a year ago period.

Net income in the quarter dropped 3.1% to 79.90 billion yen compared to 82.49 billion yen and diluted earnings per share slipped to 142.39 yen from 147.01 yen in the same period a year ago.

The vehicle maker forecasted net sales for the year to climb 2.1% to 3 trillion yen but net income to slump 2.3% to 105 billion yen.

Takata Corporation jumped 3.9% to 1,410 yen after the seatbelt and air-bag maker said net sales in the nine-month period ending in December climbed 15.6% to 469.88 billion yen from 406.33 billion yen a year ago period.

Net in the quarter swung to a loss of 32.48 billion yen compared to profit of 8.80 billion yen and diluted loss per share swung to a 390.59 yen from earnings per share of 105.86 yen in the same period a year ago.

The seatbelt and air-bag maker forecasted full-year loss of 31 billion yen from the prior estimate of 25 billion yen but net sales to jump 11.3% to 620 billion yen.

Almost ten automobile companies have recalled about 12 million vehicles in the U.S. and about 19 million globally, the company is still not able to determine the exact cause of the problem and acknowledged that it unable to assess the possible future costs.

Tokyu Fudosan Holdings Corp gained 0.8% to 751 yen after the real estate developer stated revenues in the nine-month period ending in December increased 2.9% to 472.97 billion yen from 459.43 billion yen a year ago period.

Net income in the quarter surged 69.4% to 14.96 billion yen compared to 8.83 billion yen and earnings per share jumped to 24.58 yen from 15.86 yen in the same period a year ago.