Nidec: Fiscal 3Q10 Financial Results

Nidec Corp. reported its results for the third quarter of fiscal 2010, which ended on December 31, 2009.

Net sales decreased ¥82,944 million, or 16.5%, to ¥421,134 million for the nine months ended December 31. 2009 compared to the same period of the previous fiscal year. Operating income increased ¥959 million, or 1.9%, to ¥51,837 million for this nine-month period compared to the previous nine-month period.

Income from continuing operations before income taxes increased ¥6,404 million, or 15.5%, to ¥47,773 million for this nine-month period compared to the previous nine-month period. This increase was mainly due to an approximately ¥6,200 million improvement in foreign exchange loss from ¥10,200 million for the previous nine-month period to ¥4,000 million for this nine-month period.

Net income attributable to Nidec Corporation also increased ¥7,040 million, or 30.5%, to ¥30,103 million for this nine-month period compared to the previous nine-month period.

Operating income ratio (operating income to net sales) for the three months ended December 31, 2009 was 15.4%, exceeds operating income ratio of 12.4% for the three months ended September 30, 2009 and more than doubles from 7.2% for the three months ended December 31, 2008.

Net sales for 3Q increased approximately ¥7,100 million, or 5%, to ¥152,391 million compared to 2Q. Operating income increased approximately ¥5,500 million, or 30%, to ¥23,516 million for 3Q compared to 2Q, exceeding company’s targets set under the WPR project.

Forecast of consolidated results
for the full year ending March 31, 2010:

• Net sales ¥570,000 million (down 6.7% over the previous fiscal year)
• Operating income ¥67,000 million (up 28.8% over the previous fiscal year)
• Income from continuing operations before income taxes ¥63,000 million (up 33.3% over the previous fiscal year)
• Net income attributable to Nidec Corporation ¥40,000 million (up 41.1% over the previous fiscal year)

Small precision motors

Net sales of small precision motors decreased approximately ¥1,100 million, or 1%, to ¥85,035 million for 3Q compared to 2Q, which accounted for approximately 56% of total net sales for 3Q. The decrease in net sales was mainly due to the appreciation of the average exchange rate of the Japanese yen against the U.S. dollar between the relevant periods.

Unit shipments and sales of spindle motors for HDDs for 3Q increased approximately 6% and 1%, respectively, as compared to 2Q. The average unit price of spindle motors for HDDs on a Japanese yen basis for 3Q decreased approximately 5% compared to 2Q, while the average unit price on a U.S. dollar basis for 3Q remained at the same level as that for 2Q. Unit shipments of spindle motors for 3.5-inch and 2.5-inch HDDs for 3Q increased approximately 7% and 8%, respectively, compared to this 2Q.

Net sales of small precision motors decreased approximately ¥15,100 million, or 6%, to ¥243,436 million for the nine-month period compared to the previous nine-month period, due mainly to an approximately 9% appreciation of the Japanese yen against the U.S. dollar between the two periods. Net sales of small precision motors accounted for approximately 58% of total net sales, which decreased 1 percentage point from the same ratio for the six months ended September 30, 2009.

Unit shipments and sales of spindle motors for HDDs drives for this nine-month period increased approximately 23% and 2%, respectively, compared to the previous nine-month period. The average unit price of spindle motors for HDDs on a Japanese yen basis and on a U.S. dollar basis for this nine-month period decreased 17% and 9%, respectively, compared to the previous nine-month period. Customer demand for the spindle motors for HDDs significantly increased for the nine-month period compared to the previous nine-month period, with unit shipments of spindle motors for 2.5-inch and 3.5-inch HDDs increasing approximately 31% and 18%, respectively. Demand for spindle motors for 2.5-inch HDDs has continued to increase significantly since the beginning of the current fiscal year.