Wed Jul 27, 2011
* Gradual global economic recovery to boost full-year profit
* Q1 profit falls due to quake, raw materials costs
* Strong yen, tight electricity supplies remain a risk (Adds company comment)
TOKYO, July 27 (Reuters) - Nippon Steel Corp said on Wednesday it expects its full-year recurring profit to beat last business year's despite a dip in first quarter results, betting that a gradual recovery in the global economy will bolster demand for its products.
The company, which had skipped its full-year earnings forecast in April due to an uncertain market in the aftermath of Japan's March 11 earthquake, forecast a 230 billion yen ($2.95 billion) recurring profit for the year to March 2012.
That exceeds a mean estimate of 197.8 billion yen in a poll of 21 analysts by Thomson Reuters I/B/E/S and compares with last year's profit of 226.3 billion yen.
"Overall, we expect a gradual recovery. Supply chains are returning to normal and, with them, production," the company said in a statement. A strong yen and tight electricity supplies in Japan, however, still remain a concern, it added.
The world's fourth-biggest steelmaker on Wednesday reported a 7.9 percent fall in quarterly profit after shipment volumes slumped due to the quake, while raw materials costs surged.
The company, which competes with China's Baosteel and local rival JFE Steel , logged 57 billion yen in recurring profit for April-June, compared with a 61.89 billion yen profit a year ago. Recurring profit is pretax and excludes special items.
Nippon Steel shares are nearly back to their pre-quake levels, but are still down 9.9 percent this year, underperforming the benchmark Nikkei average's 1.3 percent fall. ($1 = 78.070 Japanese Yen) (Reporting by Yuko Inoue; Editing by Anshuman Daga and Edmund Klamann)
Source:reuters