Honda, Takeda Drive Tokyo Stocks; Prius Recall

Darlington Musarurwa
03 Feb, 2010
New York City

Tokyo stocks edged higher at close. Earnings at Honda, Mitsubishi UFJ, Takeda Pharmaceuticals and Kobe Steel drove stocks in Tokyo higher. Toyota sales declined 16% in January in the U.S. and expanded its product recall to Japan.

[R]5:00AM New York, 7:00PM Tokyo – Tokyo stocks edged higher at close. Earnings at Honda, Mitsubishi UFJ Takeda Pharmaceuticals and Kobe Steel drove stocks in Tokyo higher. Toyota sales declined 16% in January in the U.S. and expanded its product recall to Japan.[/R]

Tokyo stocks edged higher after home sales contracts in the U.S. increased in December, ninth monthly increase in a row.

Investors in Japan focused on earnings from Honda, Toyota, Mitsubishi Motors and Mitsubishi UFJ. Hong Kong stocks gained following an increase in U.S. home sales contracts. Indexes in India surged after foreign investors continue to pour money and stake sale in NTPC drew a strong response in the first day of offering.

Honda revised its full year earnings outlook and benefited from the fallout of model recalls and halting of sales in the U.S. and Canada.

For the year Honda estimated earnings of 265 yen or $2.9 billion compared to its earlier forecast of 155 billion yen. Net income in the third quarter ending in December increased to 135 billion yen and average exchange rate to a dollar was 92 yen compared to its estimate of 90 yen.

Honda is struggling with its own recall to fix power switches for model City, Fit and Jazz. In its largest recall the second largest Japanese automaker will replace to switch to prevent short-circuit at 646,000 cars.

Mitsubishi Motors swung to a quarterly profit to 10.7 billion yen from a loss of 17.5 billion yen in the quarter a year ago.

Mitsubishi UFJ Financial Group, the largest Japanese financial services company reported third quarter profit of 76.1 billion yen or $842 million compared to a loss of 134.1 billion yen.

The bank benefited from the recovering securities markets and losses in its equities portfolio declined to 33.4 billion yen from 251 billion yen. However, loan losses for bad loans increased 86% in the quarter from a year ago. Outstanding loans declined to 85.5 trillion yen from 93.3 trillion yen.

In Tokyo trading Nikkei 225 Stock Average gained 0.3% or 33.24 to 10,404.33, and then broader Topix Index edged up 0.3% to 915.68.

In the first section of the Tokyo Stock Exchange 9.9 billion shares worth 725 billion yen were traded and in the second section 196 million shares valued at 2.1 billion yen changed hands.

Of the Nikkei 225 index stocks, 170 rose, 50 fell and 5 were unchanged. Furukawa Co. Ltd led gainers in the index shares with a rise of 8.1% followed by OKI Electric Industries advancing 7.9%.

Toyota U.S. Sales Fall 16% in January

Autodata Corp reported that Toyota Motor Corp’s U.S. January sales declined 16% to less than 100,000 in January from a month earlier dragged by vehicle recalls and a sales halt of more than half of its fleet of vehicles.

Honda Motor Co’s sales dropped 5% to 67,479 after car sales rose 2.7% and truck sales declined 15%.

Nissan Motor Co. sales advanced 16% to 62,572 vehicles.

U.S. vehicles sales annual rate increased to 10.8 million vehicles from 9.6 million in the previous month.

Citigroup to Open Four Branches in Japan

Citigroup Japan reported yesterday it will open four retail branches this year, with the first two locations expected to be opened in the central Tokyo districts of Marunouchi and Nihonbashi in the second quarter of the year.

The new branches will be used for smart banking services and Citibank presently has 31 branches in Japan.

Nikkei Movers

NTT Data Corporation led the decliners in the Nikkei 225 Stock Average with a loss of 5.5% followed by losses in Tosoh Corporation of 4.2%, in Hitachi Construction Machinery Co., Ltd of 3.8%, in Toyota Motor Corporation 3.8% and in Resona Holdings, Inc 3.4%.

Furukawa Co Ltd led gainers in the Nikkei 225 Stock Average with a rise of 8.0% followed by gains in Oki Electric Industry Company, Limited 7.8%, in Chugai Pharmaceutical Co Ltd of 7.6% and in Minebea Co Ltd of 7.0%.

Other Movers

Canon Inc climbed 1.3% to ¥3,660.00.

Honda Motor Co., Ltd rose 2.2% to ¥3,140.00 after it reported better than quarterly results and announced a dividend of ¥10 per share, above the latest forecast of ¥8 per share. Lower yen and higher sales helped company to deliver better than expected results.
Japan Petroleum Exploration Co., Ltd advanced 1.6% to ¥4,335.00.

Nippon Mining Holdings Inc. added 4.6% to ¥430.00 after the copper producer announced that it has raised its consolidated full-year outlook for revenue from ¥3,120,000 million to ¥3,200,000 million.

Toyota Motor Corporation fell 5.6% to ¥3,400.00 after the company expanded its recall program to Japan. Toyota plans to recall 8.1 million small car Prius, the best-selling car in Japan to fix brake related problem.

Earnings Review

Honda Motor Co., Ltd, the manufacturer of motorcycles, automobiles and power products reported third quarter sales fell 11.5% to ¥2.24 trillion from ¥2.53 trillion a year ago. Net profit in the quarter rose 566% to ¥134.6 billion or ¥74.19 per diluted share compared to net profit of ¥20.2 billion or ¥11.16 per share a year ago.

Kobe Steel, Ltd, the steel manufacturer reported nine months sales fell 30% to ¥1.21 trillion from ¥1.72 trillion a year ago. Net loss in the nine months was ¥37.9 billion or ¥12.62 per diluted share compared to net profit of ¥42.0 billion or ¥14.00 per share a year ago.

Mitsubishi Motors Corporation, an automobile manufacturer reported third quarter sales fell 15% to ¥379.1 billion from ¥444.2 billion a year ago. Net profit in the quarter was ¥10.7 billion compared to net loss of ¥17.5 billion a year ago.

Mitsubishi UFJ Financial Group, Inc, the bank reported nine months net interest income rose 17% to ¥1.65 trillion from ¥1.41 trillion a year ago. Net profit in the nine months was ¥217 billion or ¥17.46 per diluted share compared to net loss of ¥42.0 billion or ¥4.36 per share a year ago.

Sharp Corporation, the consumer electronics maker reported nine months sales fell 12% to ¥2.02 trillion from ¥2.30 trillion a year ago. Net loss in the nine months was ¥8.59 billion compared to net loss of ¥37.8 billion a year ago.

Takeda Pharmaceutical Company Limited, the drugmaker nine month sales fell 6.2% to ¥1.13 trillion from ¥1.20 trillion a year ago. Net profit in the nine month rose 54% to ¥259.15 billion compared to net profit of ¥168.57 billion a year ago.