Seems to have gone of a cliff recently and I cant find any news via my online broker or the news as to why this might be – anyone have any ideas/thoughts?
Big stock moves are generally related to their quarterly / annual reports.
In their latest report released on May 10th, revenue and profit both increased. The problem is simply that the earnings forecast was poor. The earnings forecast shows a positive revenue growth of 85.4 billion yen, but operating profit is expected to decrease by 112.9 billion and net profit by 179.4 billion. A decrease in profits is generally viewed negatively.
NTT’s performance had been consistently positive since March 2020 and investors came to expect a continued increase in profits and revenues, but despite the expected increase in revenue, the decreased profits is seen as a disappointment.
Some say the decline in profits is intentional by recording expenses that were supposed to be paid in the future in advance.
Big picture issue is that more people are on smartphone plans with larger or unlimited data usage, so they’re using their phones for all communications usage. This obviously hurts NTT’s regional coms business (fixed-line / IP telephony subscriptions), and profits are down sharply as a result.
Investors likely think the company needs to lower costs and accelerate mobile phone segment growth. Div yield is only so-so at 3%-ish, might be some buybacks upside.
Their recent higher price was also affected by their stock split pre-new NISA.
That was a bit of an artificial bump, and things are coming back down to reality a bit.
3 comments
Big stock moves are generally related to their quarterly / annual reports.
In their latest report released on May 10th, revenue and profit both increased. The problem is simply that the earnings forecast was poor. The earnings forecast shows a positive revenue growth of 85.4 billion yen, but operating profit is expected to decrease by 112.9 billion and net profit by 179.4 billion. A decrease in profits is generally viewed negatively.
NTT’s performance had been consistently positive since March 2020 and investors came to expect a continued increase in profits and revenues, but despite the expected increase in revenue, the decreased profits is seen as a disappointment.
Some say the decline in profits is intentional by recording expenses that were supposed to be paid in the future in advance.
Roughly translated and summarized from [here](https://www.mag2.com/p/money/1454463/amp) which was the first result on Google.
Big picture issue is that more people are on smartphone plans with larger or unlimited data usage, so they’re using their phones for all communications usage. This obviously hurts NTT’s regional coms business (fixed-line / IP telephony subscriptions), and profits are down sharply as a result.
Investors likely think the company needs to lower costs and accelerate mobile phone segment growth. Div yield is only so-so at 3%-ish, might be some buybacks upside.
Their recent higher price was also affected by their stock split pre-new NISA.
That was a bit of an artificial bump, and things are coming back down to reality a bit.