Asia’s earnings spotlight shifts to Japan next week as the yen may find a fresh support after the Federal Reserve hinted the latest interest-rate increase may mark the tightening cycle peak.
(Bloomberg) — Asia’s earnings spotlight shifts to Japan next week as the yen may find a fresh support after the Federal Reserve hinted the latest interest-rate increase may mark the tightening cycle peak.
The currency outlook may prompt Japanese companies to revise earnings forecasts for the coming quarters. Nintendo Co. cut its full-year profit outlook in February as stubbornly high inflation crimped entertainment spending. Toyota Motor Corp. has been benefiting as the weaker yen boosted earnings from overseas.
Where the Bank of Japan takes its yield-curve-control policy later this year will be key. The BOJ maintained its ultra-loose monetary policy in its first decision under new Governor Kazuo Ueda. It also announced a long-term policy review, with Ueda saying a normalization is possible even during the process.
SoftBank Group Corp., which suffered through the global tech rout last year, is in focus next week as the recent tech recovery may alleviate some of its investment valuation losses. South Korean internet giant Naver Corp. and Apple Inc.’s partner Hon Hai Precision Industry Co. may offer more clues on industry momentum. Sales of iPhone rebounded last quarter, suggesting smartphone industry is beginning to recover from a slump in demand.
The aggregate earnings of Chinese firms have beaten consensus by about 39%, led by consumer discretionary, Bloomberg Intelligence said. Still, geopolitical tensions continue to hamper market sentiment. The strong first-quarter reporting season in India and Southeast Asia may offset weakness, BI analysts Marvin Chen and Sufianti added. Indian state-owned firm Coal India Ltd. and homegrown automaker Tata Motors Ltd. are also up.
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- For more on what’s going on in other regions, see the US Earnings Week Ahead or the EMEA Earnings Week Ahead, and see the ESG Week Ahead for a selection of the environmental, social and governance themes that may come up on earnings calls.
Highlights to look out for:
Sunday: Coal India’s (COAL IN) fourth-quarter results benefited from surging demand in India. The output target for the year ended March was exceeded, with production in the final quarter rising more than 7%. That, along with higher sale of the fuel through auctions that fetch better prices, may boost net income of the world’s biggest coal miner by 16% from a year earlier. The company has ample stocks ahead of the summer season peak power demand. Watch for comments on sales offtake in the months ahead and e-auctions volume, after top soil excavation from mines was boosted by 31% to step up production during the monsoon months.
Monday: Naver (035420 KS) reports first-quarter earnings before the market open. The South Korea’s top portal operator may say operating profit rose to 315.1 billion won from 301.8 billion won a year earlier, a Bloomberg survey shows. Strong Webtoon adoption and new services supporting e-commerce gains should help it meet consensus, but the uncertain macro environment is a downside risk to its first-half outlook, BI analyst Tiffany Tam and Robert Lee said. The conference call starting at 9 a.m. local time may feature more guidance after the completion of its Poshmark acquisition.
Tuesday: Nintendo (7974 JP) is due after it missed console sales targets toward year-end and cut guidance, missing the average analyst estimate. Many investors had expected the video game giant to boost guidance thanks to twin games Pokémon Scarlet and Pokémon Violet, which became the fastest-selling Nintendo games ever, while Splatoon 3 set a new high for fastest domestic sales in Japan. The guidance cut implied Switch unit sales could fall at least 20% in the quarter through March, BI analyst Nathan Naidu said. A new Zelda game might fuel a turnaround in the first quarter, he added. Nintendo blamed currency volatility for the forecast cut.
Wednesday: Toyota Motor’s (7203 JP) results may show how increased capacity and optimized production in North America and Asia helped cement its position as the world’s top-selling carmaker with a record 10.7 million units built in the year ended March 31. In February, Toyota forecast full-year operating income of 2.4 trillion yen. The guidance was “conservative” and the final result may exceed it by 10%, according to BI analyst Tatsuo Yoshida. Fourth-quarter profit may rise from a year earlier, helped by a sales recovery in Japan and a weaker yen, he said. Watch for fresh comments on the recent manipulation of crash test results at the Daihatsu subsidiary. Toyota is investigating whether the issue is more widespread.
Thursday: SoftBank Group (9984 JP) might return to profit after a 783 billion-yen loss in the third quarter. The global tech sector rebound may mitigate Vision Funds losses, BI analysts Marvin Lo and Chris Muckensturm said. SoftBank founder Masayoshi Son has made chip design unit Arm Ltd. a strategic focus after substantial losses at the Vision Fund’s startup investments. Arm filed an initial public offering application earlier this month. Reports have said SoftBank may sell most of its stake in Chinese internet giant Alibaba Group, which analysts reckon would maximize its divestment income.
- Apple supplier Hon Hai (2317 TT) reports after the market close. First-quarter GAAP net income probably grew 1%, according to a Bloomberg survey. Its recent dispute with Lordstown Motors Corp. about terminating its investment might delay its goal of winning 5% of the global EV market by 2025 and lower the utilization rate at its Ohio factory, BI analyst Steven Tseng and Sean Chen said. Hon Hai’s quarterly revenue grew only 3.9%, based on monthly filings, underscoring a demand slowdown for iPhones and other consumer electronics. The firm forecast a decrease in business in the second quarter.
Friday: Tata Motors Ltd.’s (TTMT IN) fourth-quarter results come as weak demand and supply chain woes hold back India’s auto sector. A 27% drop in April commercial vehicle volumes may also have been due to price hikes taken to offset the cost of stricter emission norms, Citi analysts wrote in a note. Profit may jump to 27.4 billion rupees from a net loss a year earlier, according to consensus estimates. Luxury arm Jaguar Land Rover should see a spike in revenue and may give more details on its £15 billion EV spending plan.
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