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Investors face guessing game as Japan firms mute on outlook

Published 04/06/2011, 08:17 AM
Updated 04/06/2011, 08:20 AM
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By Antoni Slodkowski

TOKYO, April 6 (Reuters) - Investors struggling to gauge the impact on earnings from Japan's triple disaster may get little help from the companies themselves.

A good number of firms are expected to announce their results in the coming months without offering a forecast for the year ahead, depriving investors of a key guide on which they would normally rely to make trading decisions.

Shoe retailer ABC Mart Inc posted its full-year earnings on Wednesday without giving an estimate for the next 12 months to February 2012, citing the uncertain impact of the March 11 earthquake and tsunami on the economy.

Most Japanese firms, including big tech and auto exporters like Sony Corp and Honda Motor , have a fiscal year that runs from April to March and would normally start reporting results and forecasts in late April.

Many are expected to delay that announcement due to the quake and when they do report a good portion of them will likely opt not to disclose an annual profit forecast.

"If the companies aren't able to show their earnings, the basis for investment in their stocks completely disappears," said Masayoshi Okamoto, head of dealing at Jujiya Securities.

"In Japan investors trust companies more than analysts' reports, that's why it's such an extremely important thing."

Underscoring the uncertainty, some 460 firms listed on the Tokyo Stock Exchange have yet to tell the bourse when they plan to announce earnings for the year ended on March 31, more than 5 times the average at the same point in the last two years.

Hitachi Ltd , Fujitsu Ltd , Toyota Motor Corp and other major manufacturers were among the firms that by March 31 still had not told the TSE about their earnings schedule, the bourse's data showed.

Honda said last week that it was considering delaying its earnings announcement as it deals with production suspensions caused by the 9.0-magnitude quake.

In an unusual step, the Tokyo bourse has relaxed its rules on posting earnings and forecasts in the wake of the disaster, and the financial regulator has said firms can delay handing in their financial statements by three months.

Worries about the outlook for corporate profits may weigh on the benchmark Nikkei average , which is down about 8 percent since the massive quake and tsunami struck the northeast and triggered a crisis at a nuclear power plant.

Barclays Capital has said it expects companies listed on the TSE's main board to post on average a 12 percent decline in net profit for this financial year compared with its pre-quake forecast of a 14 percent increase.

"The Nikkei is heading for a second dip after the quake, and will likely hit a double bottom between April and June as operating losses for that period, particularly among automakers and electronics firms, are going to be severe," said Masayuki Kubota, a senior fund manager at Daiwa SB Investments Ltd. (Reporting by Antoni Slodkowski; Editing by Nathan Layne and Joseph Radford)

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