Date: 2013-08-01

Minebea Forecasts Profit Drop As Current Results Improve

Minebea Co. Ltd. (Japan), while reporting strong results for the first half of fiscal 2005 (ending March 31, 2005), warned profits for the full year will be down sharply.

The unexpectedly revised estimates put the company in the spotlight, particularly because sales and profits were expected to improve across all Minebea operations through the end of the fiscal year.

Instead, Minebea said higher costs, the effects of new business ventures, and customer inventory adjustments will result in substantially lower profitability.

For the six months ended September 2004, Minebea posted a consolidated net income of ¥1.1 billion, down 60% from the previous year, even though sales were up 9.7%.

In the same six month period, bearing related product sales were ¥49.2 billion, up more than 4% over 2003; second quarter bearing sales were up 3% over first quarter. Operating income so far this year is up ¥1.3 billion, or 14.2%.

The new consolidated net income projection for the year ending March 2005, however, has net income forecast to drop 56% from initial projections; from ¥9 billion to ¥ 5 billion, even as sales are expected to meet the ¥300 billion forecast, up 12% over the year earlier.

The new forecast to the end of the fiscal year also weights bearings more heavily, bumping the year's expected sales from ¥96.8 billion to ¥100.2 billion; up 6% over 2004's ¥94.6 billion

Minebea has been plagued by potential profitable years turning into losses. Fiscal years ended March 2003 and 2004 were both initially forecast as profitable but turned into losses, primarily due to write-downs in Minebea's securities portfolio and restructuring issues.

Minebea Group consists of Minebea Co. Ltd., and 51 related companies (49 consolidated subsidiaries and two affiliate companies). Minebea primarily manufactures and sells bearings, but also produces machinery components, special machinery components, and electronic devices.

The Bearing operations within Minebea are:

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