TOKYO - Shares in Japan's Nidec Corp slumped as much as 7% on Wednesday morning in Tokyo after the electric motor maker nearly halved its full-year profit forecast on a slow recovery of the car industry and due to expenses from a restructuring push.
After markets closed on Tuesday, the company announced a 48% cut to its operating profit forecast for the financial year through March to 110 billion yen ($843 million), well below analysts expectations.
The third-quarter result, which saw the Kyoto-based firm report an operating profit of 28 billion yen, down 37% from a year earlier, delivered investors a negative surprise, said Kazuyoshi Saito, senior analyst at Iwai Cosmo Securities.
"While profitability is likely to return next quarter after the company's restructuring costs disappear, there's uncertainty in external and macroeconomic conditions," he said.
Investors were likely to seek some evidence of the recovery the company is expecting, Saito added.
Nidec faces weakening demand in the tech sector due to a downturn in the personal computer and data centre market. A company executive said on Tuesday that the downward cycle may continue until June.
The company's share price has declined almost 50% from early last year. Shares traded at 7,114 yen on Wednesday, last down 5.8% on the day but still holding above a 2-1/2 year low of 6,658 yen hit on Jan. 4.
($1 = 130.35 yen)
(Reporting by Daniel Leussink; Editing by Jacqueline Wong and Muralikumar Anantharaman)