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Investing.com -- Shares of Shin-Etsu Chemical dropped 3.7% on Monday after the company reported second-quarter operating profit that fell short of market expectations.
The Japanese chemical manufacturer posted an operating profit of ¥167 billion, below the consensus forecast of ¥177 billion and closer to Mizuho’s estimate of ¥173 billion.
The company’s infrastructure materials segment, which includes PVC and caustic soda products, continued to struggle, likely requiring improvement in the U.S. housing market to see better performance.
IT materials showed stronger results, though the company provided limited breakdown of the various components within this segment, which includes rare earth materials, wafers, and photomasks.
The lack of detailed information makes it difficult to draw conclusions for wafer specialist Sumco, which is scheduled to report its results on November 11.
Shin-Etsu maintained its full-year guidance of ¥635 billion in operating profit. While analysts don’t anticipate downside risks to the company’s targets, the current market consensus of ¥707 billion for full-year operating profit will likely need to be revised downward.
Potential upside in the second half could come from rare earth magnets, where the company has been proactively building inventory amid geopolitical uncertainties.
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