TOKYO: Nippon Steel Corp, the world's No. 4 steelmaker, reported a quarterly net loss, hit by earthquake-related losses, and did not give a forecast for the current financial year due to an uncertain outlook for demand.
Japan's major automakers -- key buyers of steel -- announced big production cuts after the March 11 earthquake and tsunami, which savaged the sector's parts-supply chains.
Many analysts expect Japan's steel mills to tumble into the red on a pretax basis in the April-June quarter. Nippon Steel's top domestic rival -- JFE Holdings -- also did not give a profit forecast for the current year.
Nippon Steel said it may cut crude steel output in April-June by 7 to 8 percent from the previous quarter.
Still, shares of Nippon Steel rose 1.6 percent after the results announcement, outperforming a 1.1 percent gain in the Nikkei average.
"Nippon Steel, like JFE, is strong in supplying high-end steel for automobiles," said Masayuki Kubota, a senior fund manager at Daiwa SB Investments.
"The impact from the earthquake on earnings will likely be temporary, given that demand for automobiles remains strong worldwide. So Nippon Steel is a buy, in the medium- to long-term."
Nippon Steel, which competes with Asian firms including POSCO and Baosteel, booked a net loss of 11.2 billion yen ($136.2 million) for January-March, the fourth quarter of the 2010/11 financial year. That compared with a 33.4 billion yen profit in the preceding three months and a 34.3 billion yen profit a year earlier.
The average net profit forecast of five analysts who gave estimates after the disaster calls for Nippon Steel to post 92.43 billion yen in the year that began on April 1.
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