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Investing.com -- NHK Spring shares dropped 17.1% after the company reported second-quarter operating profit that fell short of market expectations.
The Japanese manufacturer posted an operating profit of 7.5 billion yen for the quarter, representing a 31% year-over-year decline. This result missed the consensus estimate of 8.8 billion yen, though it was closer to Mizuho’s projection of 7.1 billion yen.
The automotive segment emerged as the primary drag on performance, with lower OEM production volumes combining with higher costs to pressure results. Additionally, the company’s hard disk drive (HDD) suspension business experienced a quarter-over-quarter decline, a development the company had previously signaled would occur.
The HDD business decline followed an unusually strong previous quarter that featured shipments of higher average selling price products, including HAMR-related components, ahead of mass production ramp. The company indicated these conditions normalized in the second quarter.
Despite the quarterly miss, NHK Spring maintained its full-year operating profit forecast of 47 billion yen, likely adjusting internal projections by reducing automotive segment expectations while raising HDD division forecasts.
The company will hold its earnings briefing on Friday, November 28.
NHK Spring, along with TDK, remains a critical bottleneck in global HDD production with tight supply-demand dynamics. Both companies have shown reluctance to invest in new capacity for what they view as mature technology, though there may be opportunities to increase productivity and marginally boost volumes.
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