* Q4 recurring profit Y24.3 bln vs Y73.6 bln yr ago
* JFE does not give guidance for 2011/12 earnings
* Consensus estimate for 2011/12 profit Y113 bln vs Y165.8 bln yr ago
* JFE shares jump 3.5 pct, bad news priced in - fund manager (Recasts, adds executive comment)
By Yuko Inoue
TOKYO, April 21 (Reuters) - JFE Holdings Inc , the world's No.5 steelmaker, sees a recovery in Asia's steel market as key for its earnings growth in the year ahead after a devastating quake sapped domestic demand and cut its quarterly profit by nearly 70 percent.
JFE, which vies with Asian rivals like POSCO , Baosteel and Nippon Steel, failed to provide earnings guidance for this financial year after the March 11 quake and tsunami disrupted supply chains for carmakers, key buyers of steel, and forced them to slash production.
But signs of improving demand in elsewhere in Asia will allow JFE to boost export prices to pass on higher costs for iron ore and coking coal in the April-June quarter, JFE said.
"It will take some time until we see a recovery in domestic demand," Yoshio Ishikawa, executive vice president at JFE, told a news conference. "Whether we can raise output depends on the export market in Asia and we are not pessimistic about the pricing trend there."
JFE on Thursday kicked off the sector's earnings, with an annual profit largely in line with estimates even after a 28.4 billion yen quake-related extraordinary loss.
Shares of JFE jumped 3.5 percent after the announcement, reflecting a view among investors that the worst of the news on JFE was now priced into the stock. The benchmark Nikkei average was up 0.8 percent.
"JFE's earnings in the near-term will be hit, given the drop in Japan's car output after the quake," said Masayuki Kubota, senior fund manager at Daiwa SB Investments.
"But global demand for cars continues to grow, and if the U.S. economy is on solid footing, as suggested by the firmness in U.S. stocks, then JFE will stand to gain over the long term."
PROFITS HIT
JFE's January-March profit fell to 24.3 billion yen ($295 million) from a 73.6 billion yen profit in the same quarter a year ago due in part to lost shipments and lower output after the quake.
The average estimate of five analysts who issued forecasts after the earthquake called for JFE to book a recurring profit of 113 billion yen for the 2011/12 year, according to Thomson Reuters I/B/E/S. Estimates ranged from 50 billion to 164 billion yen.
Its annual recurring profit was 165.8 billion yen, more than double a year earlier, as shipment volume increased on strong demand from Asia's emerging markets, although high input costs and a delay in price hikes squeezed margins.
Japan's economy is likely to contract in the April-June quarter and production cuts at carmakers will deal a serious blow to Japan's top three blast furnace steelmakers later this year.
In addition, JFE and its rivals Nippon Steel and Sumitomo Metal Industries will have tough time to win big enough price hikes from struggling carmakers and other domestic clients to offset higher input costs.
Toyota Motor Corp and other automakers have resumed production at all domestic factories in stages from April 11, but output levels will be at half of original plans due to a shortage of parts. [ID:nL3E7F81GD] ($1 = 82.465 Japanese Yen) (Additional reporting by Chikako Mogi; Editing by Lincoln Feast and Edmund Klamann)