Nidec Corporation, a prominent Japanese manufacturer of electric motors and related equipment, reported a significant decrease in its second-quarter net profit. The decline was attributed to the underperformance of its machinery business and the strengthening of the yen.
For the three months ending September 30, Nidec's net profit fell by 53% year-over-year to 19.49 billion yen, approximately $1.29 billion. This result was below analyst expectations, which predicted a profit of 43.66 billion yen, according to FactSet.
Despite a challenging quarter, the company's revenue saw an 8.9% increase, reaching 645.645 billion yen. However, the operating profit from its machinery segment plummeted by 29% to 8.62 billion yen.
Additionally, Nidec recorded foreign exchange losses of 42.25 billion yen due to the strengthening yen, a stark contrast to a gain of 1.68 billion yen in the same period last year. A stronger yen typically erodes the earnings of Japanese companies by reducing the competitiveness of exports and the yen-denominated value of overseas profits.
