Shimano Lowers Forecast in Wake of Earnings Decline

 

The company said operating income at its Bicycle Components segment rose 11.6 percent to ¥21.2 billion ($265 mm) on a 4.5 percent increase in sales to ¥128.7 billion ($1.61 bb). Shimano said that while rain dampened sales in Europe and the United States in June and July, the market for sports bicycles in China continued to grow greatly over the prior year. Sales of DeoreXT mountain bike components and Tiagra road bike components remained brisk and order updake for Ultegra road bike components and Di2 digital shifters were “upbeat.”

 

In the Fishing Tackle segment, operating income increased 0.9 percent to ¥1.7 billion ($21 mm) on a 1.3 increase in sales to ¥32.4 billion ($405 mm). Fishing in markets affected by the Great East Japan Earthquake has yet to recover, although sales of the Scorpion DC seires of double-axis bait-casting reels and the Poison Glorious rod series continued to sell strongly due to the continued popularity of bass fishing. Despite the European debt crisis and rapid appreciation of the yen, overseas sales exceeded last year’s levels.

 

The company ended the period with $40.6 billion ($53 mm) in merchandise, finished goods, work in progress and raw materials and supplies, up 10.6 percent from a year earlier.

The company said it did not see much room for optimism concerning prospects for the Japanese economy due to the rising specter of recession haunting overseas economies and the possibility that the strong yen will persist. The company lowered its forecast for fiscal 2011 sales to ¥221 million, 1.8 percent lower than its July 27 guidance. It currently expects to generate fiscal 2011 operating income of ¥31 million and ordinary income of ¥31.5 million, or about 4.0 percent less than forecast in late July.