Nidec’s July-September operating profit hits record high Contribution from weaker yen | Reuters

TOKYO (Reuters) – Japan’s Nidec Corporation announced on Wednesday that it posted consolidated operating profit of 51.7 billion yen, up 15.9% from the same period last year, in the July-September quarter (based on international accounting standards). In addition to price pass-through and cost reduction, sales and profit increased due to the weaker yen. The forecast for the full year ending March 2011 remained unchanged.

The impact of the depreciation of the yen pushed up operating profit for the July-September period by 2.1 billion yen compared to the previous term. Operating profit for the April-September period was 17 billion yen higher than the previous year. The annual exchange rate sensitivity is 10 billion yen in sales and 1.1 billion yen in operating income per US dollar per 1 yen change. For the euro, sales are expected to be 1.9 billion yen and operating profit is 400 million yen. The exchange rate assumed by the company for this fiscal year is 110 yen to the dollar and 125 yen to the euro.

By sector, consumer electronics, commercial, and industrial applications were firm. Automotive products achieved profitability for the first time in three quarters. As for small precision motors, sales for IT and home appliances were strong, but the sales volume of hard disk drive (HDD) motors decreased, resulting in a decrease in profits compared to the previous quarter.

Managing Executive Officer Kazuya Hayafune, who is in charge of the automotive business, said at a press conference announcing the financial results that “sales are growing rapidly” due to strong orders in China and Europe, which are advanced countries for EVs. It is said that mass production of the second generation of the EV traction motor “E-Axle” has also started, and it is becoming clear that the automotive business will become profitable in a single year.

The consolidated operating income forecast for the full year ending March 2011 is 210 billion yen (up 23.3% from the previous year), leaving the previous forecast unchanged. The average consensus forecast of 22 analysts compiled by IBES was 211 billion yen. In the April-September quarter, operating profit increased 8% year-on-year to 96.3 billion yen.

On the 7th, Toyo Keizai Online reported the company’s insider trading suspicion, and Nidec’s stock price fell more than 9% on the 11th. CFO Akinobu Samura denied the report, saying it was “absolutely groundless.” He pointed out that the article was written without understanding how to trade treasury stock, and criticized it, saying, “It is an undeniable fact that the company has been falsely accused of insider trading.” Nidec announced on the 24th that it will sue Toyo Keizai Inc. and other companies and seek compensation for damages, deletion of articles, and posting of apology advertisements.

Nidec, which was founded in 1973 by Chairman and CEO Shigenobu Nagamori, will celebrate its 50th anniversary next year. The company plans to announce a new management system, including a successor, by April 2023, and CEO Nagamori said on the day, “We are making steady progress in building the system.”

*Please see here for financial figures.