Kobe Steel Revises Earnings Forecast
02/09/2009 - Kobe Steel revises its outlook based on recent trends in its operating results.
Kobe Steel, Ltd. has revised its outlook based on recent trends in its operating results. The company’s previous forecast had been announced on October 30, 2008, when it announced its half-year operating results.
The company said that it now anticipates the worldwide economic slump will cause its business environment to become increasingly severe in its fourth quarter, which runs from January to March 2009.
The company expects that its Iron & Steel segment sales volume (amount of tonnage sold) and Aluminum & Copper segment sales volumes to decrease along with unit sales of hydraulic excavators in the Construction Machinery segment. As a result, the company anticipates consolidated net sales will decrease 220.0 billion yen to about 2,200.0 billion yen.
Lower sales volumes and unit sales will negatively impact consolidated operating income. In addition, said the company, its Aluminum & Copper segment will undergo a loss on inventory valuation due to a fall in ingot prices that is expected to widen. As a result of these factors, the company expects its operating income to decrease 81.0 billion yen to about 119.0 billion yen, and ordinary income anticipated to go down 89.0 billion yen to about 71.0 billion yen.
The company also expects net income to go down 67.0 billion yen to about 13.0 billion yen, on the basis of additional extraordinary loss on the write-down of investments in securities in the third quarter.
On a nonconsolidated basis, the company anticipates net sales will decline 145.0 billion yen to about 1,395.0 billion yen. Operating income is projected to decrease 56.0 billion yen to about 64.0 billion yen, and ordinary income is expected to go down 56.0 billion yen to about 44.0 billion yen.
Net income for fiscal 2008 (through March 2009) is forecast to go down 44.0 billion yen to about 11.0 billion yen, on the basis of additional extraordinary loss on the write-down of investments in securities in the third quarter.
