Apple supplier Nidec slashes profit forecast on weak demand from China
TOKYO — Nidec Corp. 6594, -2.74% , a bellwether for the global economy as a supplier of components for Apple Inc. AAPL, +0.59% smartphones and other consumer products, slashed its earnings forecast and blamed the U.S.-China trade conflict for a sharp slowdown in Chinese demand.
“I’ve been a manager for almost half a century, but this is the first time I’ve seen such a large single-month drop in orders for us,” said Nidec Chief Executive Shigenobu Nagamori. “What we witnessed in November and December was just extraordinary.”
Nagamori said the Japanese company, which is the top global supplier of motors used in electronics, reduced production at the end of 2018 for Chinese auto and appliance makers by more than 30% because of weak demand.
The Kyoto-based company on Thursday cut its revenue forecast by almost 10% to ¥1.45 trillion ($13 billion) for its fiscal year ending March 31. It also lowered its profit forecast for the year by about 25%. Nidec’s gloomy outlook is another sign that the global economy is facing turbulence and could presage disappointing results from companies world-wide in the earnings season ahead.
An expanded version of this report appears on WSJ.com.
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