Mitsubishi Corp. (8058), which together with BHP Billiton Ltd. (BHP) owns the world’s largest coal exporting business, fell the most in five months after cutting its annual profit target by 34 percent and reducing the dividend forecast.
The shares dropped as much as 5.6 percent on the Tokyo Stock Exchange. The stock was down 4.6 percent to 1,364 yen as of 9:30 a.m. and a close at that price would be the biggest decline since May 18.
Mitsubishi cut the annual dividend forecast to 50 yen from 70 yen. That compares with the 65 yen payout last year.
“There was no real surprise in the revised profit outlook but the major downward revision in dividends was more than the market expected,” Jiro Iokibe, an analyst at Daiwa Securities Group Inc. said today in Tokyo. “It seems that the negatives are cleared out now, but there’s a lack of clarity on when the profits will rise and hence drive the share price.”
Profit this year may drop to 330 billion yen ($4.16 billion), compared to an initial forecast of 500 billion yen, Mitsubishi said on Oct. 19 after the market closed. A slide in iron ore and coal prices due to a slowdown in China’s economy this year, and strikes at the BHP Billiton Mitsubishi Alliance mines in Australia have shrunk profits at the trader’s metals unit, its biggest earner last year.
Mitsubishi’s profit target cut was bigger than expected by brokers. UBS AG (UBSN) Tokyo-based analyst Katsuya Takeuchi said in an Oct. 2 report that he expected Mitsubishi to revise the profit forecast to 350 billion yen. Barclays Plc. Tokyo-based analyst Kazuhisa Mori forecast a drop to 380 billion yen in an Oct. 3 report.
Mitsubishi Chief Financial Officer Ryoichi Ueda said Aug. 2 that the company will review its 500 billion yen profit target at the end of the next quarter on worsening demand for bulk commodities and strikes at Australian operations.
The trader also cited the European debt crisis, poor conditions in the chemical markets and the risk of writedowns of marketable securities as factors for the profit forecast downgrade last week.
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