JFE, Fanuc Earnings Drive Stocks Lower

123jump.com Staff
24 Apr, 2008
New York City

Stocks in Japan edged lower after JFE Holdings reported revenue rise of 8.6% and earnings decline of 12.6%. The company also hinted that a sharp rise in raw materials costs from Australia will force it to revise prices of steel products higher and did not give earnings guidance for the rest of the year. Fanuc also estimated 4.6% decline in operating income. The BOJ reported March corporate services price index rose 0.4% after rising 0.7% in February.

[R]5:00AM New York, 7:00PM Tokyo – Fanuc earnings to decline 4.6% and JFE Holdings declined to give earnings outlook.[/R]

Japan stock averages fell on a spate of negative earnings news from Fanuc and JFE Holdings declining to issue a forecast on uncertainty over future steel prices.

Market sentiment

In Tokyo trading Nikkei 225 fell 0.28% or 38.29 at 13, 540.87, and the broader Topix Index fell 0.5% or 6.82 at 1,307.57.

In the first section of the Tokyo Stock Exchange 7.7 billion shares worth 909 billion yen were traded and in the second section 160 million shares valued at 3.3 billion yen changed hands.

Of the Nikkei 225 stocks 63 gained, 151 declined, and 11 were unchanged. Nippon Sheet Glass led advancers in the index shares with a rise of 6.89% followed by Daiwa House Industries rising 4.21%.

Corporate service- prices increase rose 0.4% in March

The Bank of Japan reported on its Web site today that the country’s corporate-service prices, which measures prices paid by businesses for services, increased 0.4% on the year in March from 0.7% in February.

Economists had projected an increase of at least 0.7% and attributed the slowing growth to a rising yen and reduced charges by mobile phone operators.

In the month under review transportation charges eased to 2.6% from 3.5% in February, when mobile phone charges dropped 8.6% in the wake of fierce competition among players in the industry-KDDI Corp, NTT DoCoMo and Softbank Corp.

Advertising fees also slipped 2.5% on rising ads on the Internet.

Fanuc forecasts 4.6% drop in profit

Fanuc reported today that it expects operating profit to slump for the first time in seven years by 4.6% to 180.8 billion yen on a rising yen.


JFE Holdings annual earnings fell 12.6%

JFE Holdings reported today on its Web site that annual net income in the month ended December 31 declined 12.6% to 261 billion yen from 299 billion yen a year ago as sales advanced 8.6% year-on-year to 3.5 billion yen from 3.2 billion yen a year ago.

JFE expects an unprecedented increase in raw materials prices, reflecting the global boom in steel demand and price for steel products will rise in Japan too.

Company annual financials noted, “The company is currently in the process of negotiating revised steel prices and has foregone publication of results forecasts for this sector because reasonable forecasts cannot be calculated at this time.”

Gainers & Losers

Nippon Sheet Glass led advancers in the Nikkei 225 index shares with a rise of 6.89% followed by increases in Daiwa House Industries of 4.21%, in Taiheiyo Cement of 3.75%, in CSK Holdings Corp of 3.69%, and Osaka Gas Co. of 3.34%.

Shipping lines gained on speculation global demand for raw materials will increase. Mitsui O.S.K. Lines gained 2.43% and Kawasaki Kisen increased 2.30%.

Nippon Soda Co. led decliners in the Nikkei 225 index shares with a drop of 10.55%, in Ebara Corp. of 7.41%, in Mazda Motor Corp. of 4.11%, Nippon Oil of 4.03%, and Showa Shell of 3%.

Nippon Oil fell after crude oil prices fell below $118 per barrel on a strengthening yen.

Steel companies fell after JFE Holdings annual profit fell 12.6% to 261 billion yen from 299 billion yen a year ago. Kobe Steel declined 2.56%.