TOKYO (Reuters) – Nidec shares plunged by almost 9% early on Tuesday, following the electric motor maker’s decision to maintain its annual forecast despite reporting an increase in quarterly operating profit.
The shares of the Kyoto-based company were down 8.5% during mid-morning trading, after initially being left untraded due to an overflow of sell orders in the beginning of the day.
On Monday, after the market had closed, Nidec revealed a 7.6% rise in quarterly operating profit, which had been driven by improved sales and the depreciation of the yen. However, the company decided to uphold its full-year outlook.
This news has left investors disappointed, leading to the decline in Nidec’s share prices during today’s session. It is unclear at this time whether the company’s decision to maintain its forecast is due to concerns about potential challenges in the future or if it is simply a cautious approach taken by the management.
Nidec is a major player in the electric motor industry, known for supplying motors for various applications such as automobiles and home appliances. As such, any changes in the company’s performance and outlook can greatly impact investor sentiment.
Investors were likely hoping for a more positive revision to the annual forecast, especially given the company’s strong quarterly results. However, the decision to keep the outlook unchanged suggests that Nidec may be facing headwinds or uncertainties that could affect its performance in the coming months.
In addition to the quarterly operating profit increase, Nidec’s sales growth and favorable currency exchange rates had contributed to the company’s financial performance. The weaker yen has provided a boost to the company’s exports, making its products more competitive in international markets.
The outcome of this decision will be closely watched by investors and industry analysts, as it may give insights into the company’s future prospects and its ability to navigate potential challenges in the global market.
It remains to be seen whether the decline in Nidec’s share prices is a short-term reaction or if it reflects a broader concern about the company’s future growth. Market participants will be monitoring any further developments from the company to assess its long-term trajectory.
This article was written by Mariko Katsumura and edited by Jacqueline Wong.
