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Kobe Steel Boosts Earnings Forecast, Shares Surge by 9%

Kobe Steel sees a remarkable share increase of approximately 9% in Japan after announcing an uplifting fiscal 2024 earnings forecast, despite lower nine-month profits. Investors respond positively to the company's improved dividend outlook.

Date: 
AI Rating:   6

Kobe Steel Stock Analysis

Kobe Steel has recently updated its forecasts, notable for both fiscal year 2024 and the dividend per share. The lifting of the earnings forecast along with a notable dividend increase may positively influence investor sentiment.

Earnings Per Share (EPS)
Basic earnings per share for the nine months have dropped to 260.58 yen from 277.83 yen, indicating a decline. However, the forecast for fiscal 2024 anticipates growth in EPS to 329.52 yen, which is an 18.7% increase from the previous fiscal year. This forward-looking improvement can attract investors.

Revenue Growth
Sales figures indicate a minor increase of 0.6% year-over-year for the nine-month period. Nevertheless, the company projects an overall growth for fiscal 2024, anticipating net sales of 2.58 trillion yen, which is a 1.4% increase from last year. This modest growth reflects stability.

Net Income
There has been a decline in the net profit attributable to owners, dropping 6.3% compared to the previous year. However, the forecasted attributable profit for fiscal 2024 at 130 billion yen suggests that the company is on a path to recovery.

Profit Margins
Operating profit has declined by 10% compared to the prior year, signaling tightening margins. The projected operating profit for fiscal 2024 is expected to be 140 billion yen, which marks a decreased rate from previous earnings.

Dividends
The dividend per share has been revised upwards from 45 yen to 55 yen, increasing the total dividend for the year from 90 yen to 100 yen per share. This increase in returns to shareholders is a positive signal and may boost investor confidence.

Conclusion
The market's reaction, with shares up approximately 9%, reflects a generally favorable outlook despite some declines in recent profit performance. The revisions in forecasts alongside increased dividends may energize investor sentiment going forward.

Stocks:  KBSTY