Nidec's Quarterly Profit Surge

TOKYO (Reuters) – Japanese electric motor maker Nidec posted a 10% rise in quarterly operating profit on Wednesday, aided by cost cuts, and maintained its full-year outlook, anticipating growing sales of cooling systems for AI data centres.

Operating profit for the three months ending September totaled 60.7 billion yen (approximately $398.79 million), up from 55.1 billion yen during the same period last year. This exceeded the average profit estimate of 56.5 billion yen based on a survey of eight analysts by LSEG.

The Kyoto-based firm upheld its full-year forecast for an operating profit of 240 billion yen, nearly a 50% increase compared to the previous year's results.

Nidec aims to leverage the surge in demand for water-cooling modules intended for artificial intelligence data centres. The company is preparing to establish a supply system for strategic products linked to water cooling modules in the latter half of this financial year.

Previously, Nidec stated that its business in such models for generative AI data centres might expand to 1 trillion yen in future sales.

Additionally, Nidec made significant commitments to the global electric vehicle market by developing an e-axle traction motor, which integrates an EV's gear, motor, and power-control electronics.

Despite this, the company faces uncertainties in demand, particularly amid fierce price competition in China, the world's largest automotive market. However, Nidec reported that its traction motor-related business was profitable in China during the second quarter.

Looking ahead, the company plans to strengthen cooperation with joint venture partners and focus on enhancing parts supply, capitalizing on the technical and cost advantages it has developed over time.

The appreciation of the yen against both the U.S. dollar and the euro adversely affected its operating profit by about 700 million yen in the second quarter compared to the first quarter.

($1 = 152.2100 yen)