TOKYO (Reuters) -Japanese electric motor maker Nidec posted a 10% rise in quarterly operating profit on Wednesday, helped by cost cuts, and stuck to its full-year outlook on prospects of growing sales of cooling systems for AI data centres.
Operating profit for the three months to end-September totalled 60.7 billion yen ($398.79 million), compared to 55.1 billion yen in the same period a year earlier. That was better than a 56.5 billion yen average profit estimate in a survey of eight analysts by LSEG.
The Kyoto-based firm stuck to its full-year forecast for an operating profit of 240 billion yen for the year to end-March, nearly 50% better than the previous year’s result.
The company has sought to benefit from a surge in demand for water-cooling modules for artificial intelligence data centres. It said it was preparing to set up a supply system for strategic products related to water cooling modules for the second half of this financial year.
It has previously said its business in such models for generative AI data centres could expand to 1 trillion yen in sales in the future.
The company has also made a big bet on growth of the global market for electric vehicles through developing and making an e-axle traction motor that combines an EV’s gear, motor and power-control electronics.
It has, however, faced demand uncertainty in that area amid heavy price competition in China, the world’s biggest auto market. On Wednesday, it said the traction motor-related business was profitable in China in the second quarter.
“Going forward, we will further strengthen cooperation with joint venture partners and focus on promoting parts supply leveraging the technical and cost competitiveness we’ve developed,” it said in financial materials.
Nidec said the yen’s appreciation against both the U.S. dollar and the euro pushed down its operating profit by about 700 million yen in the second quarter compared to the first quarter.
($1 = 152.2100 yen)
(Reporting by Daniel Leussink; Editing by Muralikumar Anantharaman and Sonali Paul)
