Factbox: Japanese manufacturers cautious on earnings forecasts due to trade war

YASKAWA Electric

02/11/2018 04:20

TOKYO, Nov 2 (Reuters) - Earnings growth at Japanese manufacturers is being
crimped by the U.S.-China trade war, with Yaskawa Electric Corp  6506.T , Fanuc
Corp  6954.T  and Canon Inc  7751.T  among companies that were conservative with
their earnings forecasts, reflecting their customers' cautious stance on capital
expenditure plans.  
          
 Company       Sector        Trade war impact and            Strategies
                                 other factors      
  Nidec Corp     Electric    Posted record          Will move some of its
    6594.T      Appliances   operating profit for   production to Mexico from
                             April-Sept but kept    China, and plans to spend 20
                             its full-year          billion yen during this
                             operating profit       fiscal year to double
                             forecast at 195        production capacity in
                             billion yen, which     Mexico. There is still
                             undershoots 205        strong demand for traction
                             billion yen forecast   motors for EV in China, so
                             by analysts.           it will continue producing
                                                    them in China and does not
                                                    plan to cut production
                                                    there.
   Yaskawa       Electric    Cut its annual operating profit forecast to 59
   Electric     Appliances   billion yen from 65.5 billion yen for the year
     Corp                    through February, hit by a slowdown in smartphone
    6506.T                   demand in China, while caution over the trade
                             dispute makes its customers cut back on capital
                             expenditure on factory automation. 
 Komatsu Ltd.   Machinery    Raised its annual      It started shifting parts of
    6301.T                   operating profit       production to Japan and the
                             forecast to 381        U.S.
                             billion yen from 339   
                             billion yen thanks to  
                             strong sales in North  
                             America and            
                             Indonesia, but         
                             remains cautious on    
                             its China business.    
                             It cut its annual      
                             growth estimate in     
                             China, expecting       
                             10-20 percent on-year  
                             growth, down from      
                             20-30 percent it       
                             forecast in April.     
                             Its China demand grew  
                             80 percent on year in  
                             the previous year.     
                             Earlier this year, it  
                             said it would cost 4   
                             billion yen to         
                             continue               
                             manufacturing          
                             hydraulic shovels in   
                             China.                 
  Fanuc Corp     Electric    Cut its annual operating profit forecast to 150.9
    6954.T      Appliances   billion yen from 159.4 billion yen for the year
                             ending March, citing slower technology spending and
                             trade friction.
  Canon Inc     Precision    Cut its annual         It makes some products in
    7751.T     Instruments   operating profit       China, but the impact is
                             forecast to 335.5      limited, with tariffs around
                             billion yen from       1 billion yen. Said it can
                             378.5 billion yen for  avoid impact from trade war
                             the year ending        by moving production bases
                             December, hit by poor  outside China, if needed. It
                             sales in digital       added that although there
                             cameras and weaker     has not been a direct impact
                             demand in industrial   yet, if it starts hitting
                             equipment due to       the global economy, it will
                             slowing investment by  become a big problem. It has
                             its customers.         not priced in such impact
                                                    into its business yet.
 Honda Motor    Transport    Raised annual operating profit forecast by 11.3
 Co  7267.T     Equipment    percent to 790 billion yen on a weak yen and strong
                             sales of its motorcycles. The upgraded profit is
                             still a 5.2 percent fall from last year, and the
                             company remained cautions on China, where Honda's
                             retail sales have slid nearly 8 percent in
                             January-September from a year ago as cooling
                             economic growth hit the country's car sales.
 Mitsubishi      Electric    Cut operating profit forecast by 6.9 percent to 305
 Electric Co    Appliances   billion yen for the year through March as income is
  6503.T                     expected to fall below the previous forecast in the
                             industrial automation systems and electronic
                             devices segments. Said although factory automation
                             equipment demand hasn't changed in July-September
                             compared to a year ago, there is uncertainty going
                             forward.
 Mazda Motor   Transport     In July-September, Mazda's global sales fell 3
 Corp          Equipment     percent to 392,000 vehicles, led by a 17 percent
  7261.T >                   drop in sales in China as slowing economic growth
                             cooled consumer sentiment. It expects annual global
                             vehicle sales to fall to 1.62 million units from a
                             record-high of 1.63 million units, snapping its
                             five-year run of rising vehicle sales. It says
                             U.S.-China trade war which resulted in sluggish
                             stock prices has hit consumer sentiment.
        

 (Reporting by Ayai Tomisawa; Editing by Sunil Nair)
 ((ayai.tomisawa@thomsonreuters.com; 81-3-6441-1875; Reuters Messaging:
ayai.tomisawa.thomsonreuters.com@reuters.net))