TOKYO (Reuters) – Japanese electric motor maker Nidec on Tuesday reported an operating loss for the January-March quarter, hit by the costs of restructuring steps taken to combat fierce price competition in China’s electric vehicle market.
The company posted an operating loss of 6.17 billion yen ($40 million) in the fourth quarter, below the average profit estimate of 21.48 billion yen, according to a survey of eight analysts by LSEG.
Nidec has sought to capture a growing share of the global battery-powered vehicle market by developing and manufacturing an e-axle traction motor that combines the gearing, motor and power control electronics of an electric vehicle.
However, in January the Kyoto-based manufacturer cut its operating profit estimate for the year ended March 31 by nearly a fifth to 180 billion yen, warning of demand uncertainty and intensifying price competition in China’s electric vehicle market.
For the current fiscal year ending March 2025, Nidec expects its operating profit to rise 41% from a year earlier to 230 billion yen, although the forecast is still below the average estimate of 18 analysts of 242.93 billion yen.
“Signs of recovery in demand for IT equipment are gradually emerging,” Nidec said in its financial report.
“In addition, with the growing demand for data centers in the field of generative artificial intelligence, new business opportunities are emerging, such as water cooling modules.”
Ahead of the announcement, Nidec shares closed down 0.25%, underperforming its average gain of 0.3%. But the stock is still up about 18% this year.
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($1 = 154.7300 yen)