Tokyo Falls 2%; Bridgestone, Toyota Decline

123jump.com Staff
09 May, 2008
New York City

Nikkei 225 index in Tokyo trading fell 2.1% after weak earnings from Bridgestone and weaker outlook from Olympus and Toyota rattled investors. Toyota lowered its net sales and income for the current fiscal year. Bridgestone reported 1% decline in profit. Takeda Pharmaceuticals and Olympus lowered its outlook for the current fiscal year. In stock trading, utilities declined on record crude oil prices. Yokogawa Electric plunged 10% and led decliners in the index.

[R]5:00AM New York, 7:00PM Tokyo – Weak profit from Bridgestone and weaker profit outlook from Toyota dragged market averages lower.[/R]

Stocks in Japan fell on negative earnings and forecasts from Toyota Motor Corp. and Bridgestone Corp. influenced investor sentiment.

In Tokyo trading Nikkei 225 fell 2.06% or 287.92 at 13,655.34, falling 2.8% for the week, and the broader Topix Index plunged 2.3% or 31.19 to 1,341.76.

In the first section of the Tokyo Stock Exchange 9.7 billion shares worth 1.2 trillion yen were traded and in the second section 295 million shares valued at 5.7 billion yen changed hands.

Of the Nikkei 225 stocks 23 gained, 199 declined, and 3 were unchanged. Alps Electric Co. Ltd. led advancers in the index shares with a rise of 5.88% followed by Japan Tobacco rising 3.79%.

Toyota forecasts profit to fall 27.2%

Toyota lowered its consolidated financial forecast for the fiscal year ending March 31, 2009. Based on an exchange rate of 100 yen to the U.S. dollar and 155 yen to the euro, Toyota estimated consolidated net revenues of 25.00 trillion yen, operating income of 1.60 trillion yen and net income of 1.25 trillion yen.

Toyota President Katsuaki Watanabe said, """"We are facing a severe business environment. However, Toyota considers this headwind as a valuable opportunity to turn it into a more flexible and stronger company.

In the automotive industry, especially in resource-rich countries and emerging countries which are expected to continue to grow, competition with respect to compact cars and low-price cars is becoming increasingly fierce among leading global and regional auto makers.”

Toyota Motor Corporation reported for the fiscal year ending in March 2008 revenue increased 9.8% to 26.29 trillion yen (or $262 billion) from a year ago. Net income in the period rose 4.5% to 1.72 trillion yen. The company also announced cash dividend of 140 yen per share, an increase of 20% from a year ago. The dividend payout ratio improved to 25.9% from 23.4% a year ago and the company has targeted 30% as dividend payout ratio.

In fiscal year 2008, Toyota''s consolidated sales reached 8.91 million units, an increase of 389 thousand units over the last fiscal year. In Japan, vehicle sales decreased by 85 thousand units over the last year, to 2.19 million units. In North America, vehicle sales reached 2.96 million units, an increase of 16 thousand units.

Bridgestone, Olympus profit falls

Bridgestone Corp. reported profit in the first quarter ended March 31 declined 18% to 23 billion yen on higher raw-material costs.

Olympus yesterday forecasted that net income in the year ending March 2009 will drop 26% to 43 billion yen as raw materials prices continue to rise and fierce competition hurt operating margins.

Gainers & Losers

Alps Electric led advancers in the Nikkei 225 index shares with a rise of 5.88% followed by increases in Japan Tobacco of 3.79%, in Secom Ltd. of 3.78%, in UBE Industries of 3.06%, and Minebea Co. Ltd of 2.34%.

Yokogawa Electric led decliners in the Nikkei 225 index shares with a drop of 9.22% followed by losses in Sumitomo Realty of 6.83%, in Tokyu Land Corp. of 6.65%, in Mitsui Engineering & Shipbuilding of 6.34%, and Bridgestone Corp. of 6.20%.

Yokogawa Electric and other utilities fell after crude oil futures for June delivery rose yesterday to a record high of $124.61 a barrel in New York.

KDDI Corp loses subscribers in April

KDDI said in a statement today that it has lost a net 118,700 subscribers in April, the first decline since October 2000.

The company also added that it lost 234,100 subscribers from its slower ``Tu-ka'''' service that was discontinued in March, while subscribers to its high-speed ``au'''' service rose by 115,400 users, to a total 30.34 million.

KDDI forecasts a record profit this year as it focuses on the ``au'''' service and promotes new semiconductors and software that will help cut handset cost.

Takeda profits forecasted to drop 55%

Takeda Pharmaceutical Co. said in a statement to the Tokyo Stock Exchange that it expects profit will decline this year by 55%. The profit decline was attributable to its April $8.8 billion acquisition of Millennium Pharmaceutical Inc. In addition, the company forecasted net income for the year ended March 31 of 160 billion yen.