Japanese companies lose big as recession cuts deeper
Japan's Nikkei 225 stock average closed 3.12 per cent down today. But investors are more concerned by last quarter results.
The Honda Motor Co posted a 63 per cent drop in quarterly operating profit and lowered its annual profit forecasts as the slide in global car sales forced it further cut production.
Japan's second-biggest automaker now expects an operating profit for the year to end-March of 140 billion yen (US$ 1.5 billion), down from a record 953 billion yen (US$ 10.6 billion) the previous year, lower even of its earlier forecast of 180 billion yen.
Japan's second-largest bank Mizuho Financial Group said Friday it lost 50.55 billion yen (US$ 560 million) in the nine months to December due to the global financial crisis.
The group still hopes to make a net profit of 100 billion yen (US$ 1.1 billion), but this will be down from an earlier projection of 250 billion yen.
Mizuho was badly hit last year by financial market turmoil and losses on toxic mortgage-backed securities. A year earlier it had made a net profit of 393.03 billion yen (US$ 4.3 billion).
Toyota is revising downward its projections for the fourth time, with the operating loss now expected to hit 400 billion yen (US$ 4.4 billion) up from an earlier projection of 150 billion yen (US$ 1.6 billion). This is the company’s first operating loss in 70 years.
The Hitachi electronics and engineering group said it expected to lose 700 billion yen (US$ 7.8 billion) in the current year.
The electronics and engineering group now expects an operating profit of 40 billion yen, nearly one-tenth of what the company had forecast in October.
Last but not least, the All Nippon Airways (ANA) announced on Friday it expects to post its first annual loss in six years as travel to North America and Europe declines due to the global economic crisis.
Japan's second-largest airline said it now forecasts a loss of nine billion yen (US$ 100 million) for the financial year to end-March. It previously projected a profit of 17 billion (US$ 190 million).
Current and projected losses are pushing companies to cut jobs. The official unemployment rate jumped to 4.4 per cent in December from 3.9 per cent the previous month.
Industrial output in Japan's manufacturing sector also plunged 9.6 per cent from the previous month in December.