January 17, 2019 / 7:48 AM / 3 months ago

UPDATE 2-Japan's Nidec cuts profit outlook on trade war, sees unprecedented demand fall

* Lowers full-year profit outlook by 25.6 pct

* China’s economic growth set to slow to 6.3 pct - Reuters poll (Adds CEO comments)

TOKYO, Jan 17 (Reuters) - Japanese precision motor maker Nidec Corp on Thursday cut its annual operating profit outlook by a quarter as the deepening U.S.-China trade war dampened demand from automakers and home appliance manufacturers in China.

“The drop in demand in November and December was something that I’ve never seen in my long management career,” Shigenobu Nagamori, founder and chief executive of the 46-year-old company, said at an earnings briefing.

Nidec, whose motors are used in smartphones, car electronics and industrial robots, now expects profit to decline to 145 billion yen ($1.33 billion) for the year ending March, 25.6 percent lower than its previous estimates.

The revised outlook is also lower than the year-before profit of 166.8 billion yen, the Apple supplier said.

Nidec’s motor production plunged 30 percent or more for automakers and home appliances makers in China in the final two months of last year as those clients adjusted their inventories.

“We can’t tell how long this destocking would continue,” Nagamori said.

China’s escalating dispute with the United States has led to both sides imposing tariffs on each other’s goods, disrupting China’s trade sector and weighing on Chinese business and consumer confidence.

China’s economic growth is expected to slow to 6.3 percent this year, which would be the weakest in 29 years, from an expected 6.6 percent in 2018, according to a median forecast of 85 economists Reuters polled.

Last week, Japanese automation equipment maker Yaskawa Electric Corp lowered its annual operating profit outlook for the second time in three months, as caution over the Sino-U.S. trade dispute dampened Chinese manufacturers’ investment appetite.

Apple Inc earlier this month took the rare step of cutting its quarterly sales forecast, with Chief Executive Tim Cook blaming slowing iPhone sales in China. ($1 = 108.9200 yen) (Reporting by Makiko Yamazaki and Yoshiyasu Shida; Editing by Rashmi Aich, Ritsuko Ando and David Evans)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below