By Kosaku Narioka
Nidec Corp., a Japanese electric-motor maker, has reported a significant increase in its third-quarter net profit. However, the company has lowered its earnings forecasts due to intense competition in China and restructuring costs in its electric-vehicle motor business.
Impressive Third-Quarter Performance
For the three months ended December 31, Nidec’s net profit more than doubled to 39.84 billion yen ($268.5 million), surpassing the estimate of 38.94 billion yen by a poll of analysts conducted by data provider Quick. In the same period last year, the company’s net profit was 17.43 billion yen.
Nidec witnessed growth across various segments. Its operating profit from the appliance, commercial, and industrial products segment increased to 27.36 billion yen from 20.63 billion yen. The small-precision-motors business also saw significant growth, with operating profit climbing to 12.99 billion yen from 4.88 billion yen. Furthermore, the automotive products segment improved from a loss of 8.025 billion yen to an operating profit of 6.10 billion yen.
Restructuring Efforts in Response to Competitive Chinese EV Market
To enhance its financial stability and profitability, Nidec plans to book restructuring expenses for its EV traction motor business. The company has been facing severe competition in the Chinese EV market, prompting it to limit orders for unprofitable models while expanding its presence in Europe and the U.S.
Revised Forecast for Fiscal Year and Strong Revenue Performance
Nidec has adjusted its net profit forecast for the fiscal year ending in March, now expecting it to triple to 135.00 billion yen, down from the previous forecast of 165.00 billion yen. Additionally, the company anticipates a 2.5% increase in revenue to 2.300 trillion yen, compared to the earlier projection of a 1.9% decline.
During the third quarter, Nidec experienced a 4.4% rise in revenue from the previous year, reaching 594.03 billion yen, driven by gains in the U.S. and Europe.
