Japan Retail Sales Fall 1.4%; Canon Drops

Darlington Musarurwa
28 Oct, 2009
New York City

Stocks in Japan fell as investors digested barrage of negative earnings and lowered forecasts. Canon reported its seventh quarterly net decline. Toshiba revised its estimate of first half loss higher. Nomura swung to a first half profit from a year ago. Retail sales in September declined 1.4%.

[R]5:00AM New York, 7:00PM Tokyo – Stocks in Japan fell as investors digested barrage of negative earnings and lowered forecasts. Canon Inc reported its seventh quarterly net decline. Toshiba revised its estimate of first half loss higher. Nomura swung to a first half profit from a year ago. Retail sales in September declined 1.4%, less than expected.[/R]

Japanese stocks failed to recover from yesterday commodity-induced drop, as earnings results and forecasts continue to batter investor sentiment.

Though Nomura and Fujitsu recorded increases in interim results, Toshiba indicated that the outlook remains “highly opaque.”

Market losses were pared after the release of retail sales that showed smaller than expected decline.

In Tokyo trading Nikkei 225 Index fell 1.4% or 137.41 to 10,075.05, and the broader Topix Index shed 0.8% to 888.80.

In the first section of the Tokyo Stock Exchange 8.1 billion shares worth 598 billion yen were traded and in the second section 373 million shares valued at 2.3 billion yen changed hands.

Of the Nikkei 225 index stocks, 45 gained, 171 declined, and 9 were unchanged. Honda Motor Corp. led gainers in the index shares with a rise of 3.3%.

Retail Sales Ease 1.4% in September

Ministry of Industry Trade and Economy reported today that retail sales dropped 1.4% to 10.5 trillion yen in September in Japan, lower than expectations set by some economists of a fall of 1.6%.

The METI also indicated that commercial sales tumbled 22% to 41.7 trillion yen while wholesale sales fell 27.2% to 31.1 trillion yen and large-scale retail store sales dropped 4.2% to 1.5 trillion yen.

Nomura H1 Profit Soars

Nomura Holdings returned to a profit of 39.1 billion yen in the six months ended September from a loss of 149.4 billion yen in the same period a year earlier.

Total revenues rose 39.5% to 719 billion yen from 515.6 billion yen a year ago, while net revenues gained 127.4% to 598.4 billion yen.

Retail segment net revenues jumped 17.6% to 188.5 billion yen from the previous year on rising brokerage commissions and commissions for distribution of investment trusts.

In addition, net revenues for the global markets business advanced 361.6 billion yen spurred by contributions from operations of former Lehman Brothers.

Toshiba Reviews Loss to 58 billion yen

Toshiba Holdings reported yesterday that it forecasts its net sales for the first half ending September will decline 6.2% to 2.95 billion yen from 3.15 billion yen projected earlier and net loss of 80 billion yen compared to the earlier estimate of 58 billion yen.

“The outlook for the global economy in the second half of FY2009 and beyond remains highly opaque, and it is necessary to carefully assess emerging trends in the business environment and its impact,” said Toshiba in a statement.

Fujitsu Q2 Net Rises

Fujitsu second quarter net surged to 72.4 billion from 4.29 billion yen in the second quarter a year ago. Operating profit declined to 18.9 billion yen from 32.7 billion a year ago. The stake sale in Fanuc lifted the quarterly net.

Quarterly net sales plunged 10.5% to 1.14 trillion yen from the comparable year ago period.

The company was also buoyed by the sale of a 5% stake in Fanuc in August.

Fujitsu projects that for fiscal 2009 net sales will rise to 4.8 trillion yen from 4.6 trillion forecasted earlier, while net income is estimated to rise to 95 billion yen from an earlier projection for a 112 billion loss.

Gainers & Losers

Canon Inc declined 3.4% to 3,460 yen after it reported third quarter net income declined 56% to 36.7 billion yen.

Toshiba dropped 4.6% after reporting that its outlook is “highly opaque.” Canon declined 3.4% and Nikon Corp. fell 3.3%.

Shipping lines declined for the second day in a row after Nippon Yusen estimated annual loss to surge fivefold and cut its capital expenditure plan by half.

Kawasaki Kisen shed 4.5% and Nippon Yusen slid 2.6% and Mitsui OSK dropped 2.2% to 539 yen.

Leopalace 21 dropped its daily limit of 100 yen or 16% to 528 yen after it estimated a loss of 19.1 billion yen.

Shimano Inc dropped 7% to 3,660 yen. The bicycle parts maker lowered its annual profit outlook by 28% and reported net income for nine months ending in September of 58%.