Komatsu cuts profit outlook on weak demand for mining equipment
TOKYO Oct 28 (Reuters) - Komatsu Ltd, the world's No. 2 maker of excavators, dump trucks and earth movers, cut its full-year operating profit forecast by more than 30 percent on Monday, citing a worse-than-expected drop in demand for mining equipment.
Komatsu said it expects an operating profit for the year to next March of 210 billion yen ($2.16 billion), down from its prior forecast of 305 billion yen. The revised forecast was also below the average estimate of 288 billion yen from 25 analysts surveyed by Thomson Reuters I/B/E/S.
"The tough mining market prompted us to cut our outlook," Komatsu Chief Financial Officer Mikio Fujitsuka said in a media briefing in Tokyo.
U.S. rival Caterpillar Inc last Wednesday reported a lower-than-expected quarterly profit and trimmed its full-year forecast, citing weak demand for its mining equipment.
Komatsu said, however, that it expected demand for its equipment in China to accelerate.
The pace of China's economic growth quickened to 7.8 percent in the July-September quarter, the fastest pace this year. That spurt in activity follows a roll-out by the Chinese government in July of fresh investment in urban infrastructure and public services.
Komatsu's shares ended 2.6 percent higher on Monday before the company released its second-quarter earnings results and full-year forecasts, compared with a 2.2 percent rise in Tokyo's benchmark Nikkei average. Komatsu's shares are up 8 percent since the start of the year, compared with a nearly 40 percent gain for the Nikkei.
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