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Nippon Steel Q2 profit above consensus, keeps outlook

Nippon Steel Q2 profit above consensus, keeps outlook
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First Published: Wed, Oct 27 2010. 04 23 PM IST
Updated: Wed, Oct 27 2010. 04 23 PM IST
Tokyo: Nippon Steel Corp, the world’s No.4 steelmaker, swung back to profit in the latest quarter on improved demand, and it stuck to a full-year forecast below market expectations as it grapples with a stronger yen.
The yen’s rise to a 15-year high against the dollar is making Japanese steel exports less competitive in overseas markets.
Nippon Steel and top domestic rival JFE Holdings Inc could also face calls for price cuts by Japanese carmakers given weakening demand in their home market and a decline in raw materials prices.
Nippon Steel, whose main customers include automakers such as Toyota Motor Corp, reported ¥72.98 billion ($896 million) in July-September recurring profit, which is pretax and before specialitems, compared with a loss of 30.29 billion a year earlier.
The result was above a consensus estimate of ¥64.5 billion in a poll of three analysts.
The company kept its full-year outlook at ¥250 billion, below a consensus estimate of ¥265.5 billion in a poll of 17 analysts by Thomson Reuters I/B/E/S.
Last week, JFE left its annual profit outlook unchanged after reporting a better-than-expected quarterly profit. However, it cut its full-year shipment volumes by 1 million tonnes to 29 million tonnes as well as its sales forecast, citing a threat of the yen’s strength.
Shares in both Nippon Steel and its domestic peer JFE Holdings Inc have fallen about 30% this year, compared with Asian rival POSCO’s 22% fall and Baosteel’s 24% decline.
Nippon Steel’s stock was down 1.1% at ¥261 following the results.
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First Published: Wed, Oct 27 2010. 04 23 PM IST
More Topics: Nippon Steel | Revenue | Japan | Toyota Motor | POSCO |