Nidec Corp., a prominent Japanese electric-motor maker, has experienced a significant decline in its shares following the release of its second-quarter financial results. The company also revised its annual sales forecast for electric-vehicle traction motors, which further contributed to the drop in share value.
Second-Quarter Performance and Revised Sales Forecast
On Monday, after the close of the market, Nidec announced that its net profit for the three months ended September 30 had decreased by 7.3% compared to the previous year, amounting to Y42.04 billion ($280.8 million). This decline can be attributed, at least in part, to challenges faced by its machinery and auto parts businesses. However, the company did manage a modest increase in second-quarter revenue, which rose by 0.7% to Y594.61 billion.
Despite this boost in revenue, Nidec has revised its sales forecast for electric-vehicle traction motors. The company now expects to sell only 350,000 units for the fiscal year ending in March, compared to its previous projection of 545,000 units. Consequently, the estimated revenue for this business has also been reduced from Y78.1 billion to Y48.9 billion.
Strategies and Future Outlook
In response to the challenges in its electric-vehicle motor business, Nidec has implemented several measures. The company has decided to limit the sale of EV motor models that are deemed unprofitable. Additionally, Nidec plans to procure more parts from Chinese suppliers in order to streamline production time in China, which is a crucial market for EV motors.
Despite these setbacks, Nidec has chosen to maintain its overall earnings forecast for the fiscal year. The company still anticipates a 1.9% decline in revenue, with estimates totaling Y2.200 trillion. However, Nidec expects its net profit to triple, reaching Y165.00 billion.