Slow Earnings Gains in Tokyo

123jump.com Staff
05 Feb, 2008
New York City

Stocks in Japan closed lower after a string of weak earnings. Toyota reported sales rise of 9.2% and earnings gain of 7.5% in the third quarter and forecasted that the profit may decline in the current quarter on weak sales in the U.S. Toyota fell 1.8%. Mitsubishi Estate declined 4% after it reported third quarter revenue decline of 26% and income fall of 18%. Camera company Nikon reported third quarter sales increase of 14% and net income gain of 13%.

[R]5:00AM New York, 7:00PM Tokyo – Weaker than expected corporate earnings dragged market index lower. Toyota, Sanyo Electric, Yamaha Motor, and Mitsubishi Estates reported earnings.[/R]


Stocks in Japan traded in negative territory on weaker corporate results announced to the market.

Market Sentiment

In Tokyo trading Nikkei 225 declined 0.82% or 114.2 to 13,745.50 while the broader Topix Index fell 0.7% or 9.24% to 106.97.

In the first section of the Tokyo Stock Exchange 9.5 billion shares worth 1.1 trillion yen were traded and in the second section 516 billion shares valued at 4.8 billion yen changed hands.

Earnings News

Toyota Motor Corp reported today that third quarter net income rose 7.5%n to 458 billion yen from 426 billion yen a year ago and forecasted that full-year net revenues will climb 6.5% to 25 trillion yen. Net income is also projected to rise 3.4% to 1.7 trillion yen. Toyota stock fell as much as 4.8% in the late afternoon trading.

Yamaha Motor Corp announced today that its net sales for the fiscal year ending December 31 rose 11% to 1.7 trillion yen, while operating income increased by 2.8% to 126 billion yen from 123 billion yen a year ago.

The net income however fell 7.8% to 71.2 billion from 77.2 billion a year earlier. Yamaha forecasts that for the fiscal year ending December 31, 2008 will plunge 17.2% to 59 billion yen. The stock closed down 0.23%.

Mitsubishi Rayon Co declined after the company slashed its annual profit target by 30%. Sumitomo Chemical Co said it had only achieved 63% of its full year operating profit target.

Metals and Commodities

Of the Nikkei 225 stocks 95 gained, 122 declined, and 8 were unchanged. Itochu Corp. led advancers with a rise of 6.15% followed by Konami Corp gaining 5.54%.

Crude oil prices continued to fall on speculation that U.S. inventories increased to 2.2 million barrels last week.

Crude oil for March delivery fell 0.5% to $89.60 per barrel, while contract prices gained 1.2% to $90.02 per barrel yesterday. Nippon Oil Corp slipped 4.80% as a result.

Platinum prices extended gains from last week and rose 0.6% to 5,900 per gram on the Tokyo Commodities Exchange and platinum for immediate delivery jumped 0.4% to $1,805 an ounce on expectations that output from South Africa will continue to decline on power rationing.

Sumitomo Metal Industries rose 1.19% and Sumitomo Metal Mining advanced 2.76%.

Merger News

The Japan Times online edition reported today that Sapporo Holdings Limited announced in a statement that its panel, consisting of one lawyer and two outside experts, had judged that the Steel Partners Japan’s buyout proposal will hurt shareholders.

The panel believes that “the buyout plan is highly likely to hurt Sapporo Holdings Limited corporate value and it would be extremely harmful to the common interest of shareholders.”

Steel Partners recently proposed a tender offer to raise its stake 66.6% from the 17.52% equity it currently holds if the brewer’s board of directors approved the move.

The yen advanced 0.24% from 106.97 to 106.95 at the close of trade.

Gainers and Losers

Itochu Corp. led advancers of the Nikkei 225 index shares with a rise of 6.15% followed by rises in Konami Corp. of 5.54%, in Yahoo Japan Corp. of 5%, in Japan Tobacco of 4.91%, and in Denki Kagaku of 4.23%.

Mitsubishi Rayon Co. led decliners of the Nikkei index shares with a fall of 17.14% followed by rises in Olympus Corp. of 13.89%, in Sapporo Holdings of 6.87%, in Konica Minolta Holdings of 6.81%, and Sumitomo Realty of 6.09%.

Asian Markets

In Tokyo Nikkei 225 Index closed lower 114.20 or 0.82% to 13,745.50, in Hong Kong Hang Seng index decreased 223.38 or 0.89% closed to 24,808.70, in Australia ASX 200 index lower 74.50 or 1.27% to close 5,792.90.

In South Korea Kospi Index increased 6.44 or 0.38% to close at 1,696.57, in Thailand SET index closed lower 3.88 or 0.48% to 807.68, and Indonesia JSE Index edged increased 2.62 or 0.10% to 2,704.25. Sensex index in India increased 2.84 or 0.02% to 18,663.16.