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Shimano eyes world economy as it posts third-quarter results

Published October 31, 2014

OSAKA, Japan (BRAIN) — When the Bank of Japan announced a massive new stimulus program Friday, world stock markets jumped and the yen dropped to its lowest point since early 2008. But the news is unlikely to change Shimano Inc.’s financial forecast for the remainder of the year.

Despite ongoing concerns with the world economy, the Japanese company has revised its year-end forecast slightly upward for its overall business with net sales increasing to 316 billion yen ($2.8 billion), or about 1.9 percent higher than its July forecast.

And for the nine months ending Sept. 30, sales for bicycle components and fishing tackle were up 21 percent compared with the same period last year, thanks in part to a weaker yen. Net sales increased to 241 billion yen ($2.3 billion). Operating income jumped 54.5 percent to 48 billion yen ($466 million), and net income grew 35.9 percent to 34.7 billion yen ($337 million).

In releasing results for the first nine months of 2014, Shimano executives are — in general — bullish on sales in Europe despite economic sanctions leveled against Russia and weak economies in France and Italy.

And Shimano is keeping a wary eye on U.S. interest rates as 2015 approaches, now that the Fed has ended its program of quantitative easing. The company is also paying close attention to China and whether the government will maintain its GDP growth targets.

Shimano’s worldwide bicycle division saw sales jump 23.4 percent to 199.4 billion yen ($1.8 billion) in the first three quarters.

Bicycle sales in Europe rebounded thanks to a mild winter, while harsh winter weather in the U.S. temporarily dented normal sales patterns. But retail sales have generally been brisk since spring and are on par or flat with levels posted during the same period last year.

Helping to drive sales was OEM demand for disc brakes for road bikes released in the third quarter as well as updated Alivio and Tourney mountain bike components, and Shimano’s new 11-speed 105 drivetrain for road bikes.

 “In these market conditions, against a backdrop of rising expectations in view of promising market trends looking forward, order-taking was brisk as Shimano products were relatively affordable because of the depreciation of the yen,” the company said.

Shimano also noted that despite worries about the Chinese market, sales of so-called “sports bicycles” continued to grow there as well as in other Asian markets.


Topics associated with this article: Earnings/Financial Reports

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