Stocks in Tokyo Weak; T&D Plunges 11%

Darlington Musarurwa
06 Nov, 2009
New York City

Downward profit revisions and loss outlooks at several companies dragged Japan indexes lower. Bridgestone estimated annual loss on plant closure costs. Acom Co estimated a full year loss on headcount reductions. Mitsumi Electric cuts its profit outlook by 20%.

[R]5:00AM New York, 7:00PM Tokyo – Downward profit revisions and loss outlooks at several companies dragged Japan indexes lower. Bridgestone estimated annual loss on plant closure costs. Acom Co estimated a full year loss on headcount reductions. Mitsumi Electric cuts its profit outlook by 20%. T&D Holdings plunges 11% on a plan to raise 120 billion yen.[/R]

Investors in Japan were unnerved after the largest insurance company T&D filed to raise 120 billion yen, sparking worries that other insurance companies and banks may need to raise more capital. Profit downgrades and loss estimates also contributed to market jitters.

In Tokyo trading Nikkei 225 Index rose 0.7% or 71.91 to 9,789.35, falling 2.3% for the week, and the broader Topix Index fell 0.1% to 874.01, dropping 2.5% for in the week.

In the first section of the Tokyo Stock Exchange 9.2 billion shares worth 594 billion yen were traded and in the second section 747 million shares valued at 6.1 billion yen changed hands.

Of the Nikkei 225 index stocks, 114 gained, 96 dropped, and 15 were unchanged. NEC Corp. led advancers in the index shares with a rise of 10.1% after announcing it will integrate its semiconductor unit with Renesas Technology Corp.

NEC to Issue New Shares, Integrate Businesses

NEC reported today that it will offer 537 shares of common stock to raise 134 billion yen to bolster its finances. The price of the offering will be determined between November 18 and November 20.

In addition, the company will integrate the business operations of NEC Electronics Corporation and Renesas Technology Corporation, which will result in the newly integrated company becoming an equity affiliate.

The restructuring will reduce fixed costs by 290 billion yen in the fiscal year ending March 31, 2010.

T&D to Raise 120 billion yen in Offering

T&D Holdings reported today that the company intends to raise 120 billion yen through a public offer that will be used to repay its debt and “stabilise its financial base.”

Kirin Q3 Profit Falls 56.4%

Kirin Holdings reported today that its net income in the third quarter ended September 30 dropped 56.4% to 41.7 billion yen. Sales declined 1.6% to 1.7 trillion yen, while operating income fell 9.5% to 93.9 billion yen.

Also operating income in the nine-months ended September 30 declined 7.3% to 76.9 billion yen.

The brewer forecasted net income in the full year 2009 to drop 25% to 60 billion yen from its previous estimate of 45 billion yen on flat sales at 2.3 trillion yen.

Gainers & Losers

Acom Co, the consumer finance company declined 7.5% to 1,477 yen after it estimated full year loss of 11.4 billion yen and plans to eliminate 550 jobs.

Bridgestone Corp declined 3.3% to 1,436 yen after it estimated a loss of 10 billion yen in the year ending in December compared to its profit outlook of 7 billion yen.

Mitsumi Electric Co dropped 6.3% to 1,631 yen after it lowered its full year outlook to 5.3 billion yen.

NTT Urban Development Corp declined 7% to 66,600 yen after it lowered its full yen net outlook to 5 billion yen compared to 12 billion yen estimated previously.

T&D, the largest life insurance company dropped 11% on the filing to sell 120 billion yen of stocks.

Earnings Review

Acom Co., Ltd, the financial company said full-year outlook for revenues rose from ¥260,400 million to ¥276,400 million. Operating income lowered from ¥32,200 million ¥8,500 million. Ordinary income lowered from ¥32,900 million to ¥10,100 million. Net profit lowered from ¥32,000 million to net loss of ¥11,400 million and earnings per share from ¥204.84 to a loss of ¥72.67 for the fiscal year ending March 31, 2010.

Acom Co., Ltd, in the last one year traded as high as ¥4,400.00 in November 2008 and as low as ¥1,149.00 in October 2009. Based on the yesterday’s closing price of ¥1,487.00 the company has market cap of ¥228.90 billion.

Kubota Corporation, the manufacturer of farm equipment company said first-half revenues fell 22.3% to ¥444.6 billion from ¥572.3 billion a year ago. Net profit for the first-half fell 46% to ¥19.3 billion or ¥75.91 per diluted share compared to net profit of ¥35.7 billion or ¥139.75 per share a year ago.

Kubota Corporation, in the last one year traded as high as ¥872.00 in July 2009 and as low as ¥423.00 in February 2009. Based on the yesterday’s closing price of ¥709.00 the company has market cap of ¥901.87 billion.

Sanyo Electric Co., Ltd, the electronics giant said first-half sales fell 22% to ¥784.0 billion from ¥1.00 trillion a year ago. Net loss for the first-half was ¥37.4 billion compared to net profit of ¥32.6 billion a year ago.

Sanyo Electric Co., Ltd, in the last one year traded as high as ¥279.00 in June 2009 and as low as ¥132.00 in March 2009. Based on the yesterday’s closing price of ¥174.00 the company has market cap of ¥508.24 billion.

Sumitomo Realty & Development Co, the real estate company said first-half revenues rose 5.2% to ¥329.8 billion from ¥313.4 billion a year ago. Net profit for the first-half rose 43% to ¥32.9 billion or ¥57.28 per diluted share compared to net profit of ¥23.0 billion or ¥42.98 per share a year ago.

Sumitomo Realty & Development Co, in the last one year traded as high as ¥2,165.00 in August 2009 and as low as ¥791.00 in March 2009. Based on the yesterday’s closing price of ¥1,626.00 the company has market cap of ¥773.03 billion.

Nikkei 200 Average Movers

T&D Holdings, Inc. led the decliners in the Nikkei 225 index of 10.7% followed by losses in Mitsumi Electric Co., Ltd. of 6.2%, in Sumitomo Realty & Development Co., Ltd. of 3.9%, in Taiheiyo Cement Corporation of 3.5% and in East Japan Railway Company of 3.0%.

NEC Corporation led gainers in the Nikkei 225 index with a rise of 10.0% followed by gains Pioneer Corporation of 8.8%, in Sapporo Holdings Limited of 7.5%, in Asahi Glass Company, Limited of 6.5%, and in Mitsui Mining and Smelting Company, Limited of 6.0%.