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Shimano Cuts Forecast on Oversupply

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OSAKA, Japan (Aug 23)- Shimano Inc., the world’s largest maker of bicycle parts, trimmed its full-year forecast for the second time in three months as price pressure and materials costs crimp profitability. Shimano, which also makes fishing tackle and snowboarding equipment, said the forecast revision was made on rising bicycle imports from China and higher […]

OSAKA, Japan (Aug 23)- Shimano Inc., the world’s largest maker of bicycle parts, trimmed its full-year forecast for the second time in three months as price pressure and materials costs crimp profitability.

Shimano, which also makes fishing tackle and snowboarding equipment, said the forecast revision was made on rising bicycle imports from China and higher costs for the materials the company uses to make bicycle gears, chains and brakes.

The company said it expects full-year net income of 19 billion yen ($173 million), 7.8 % lower from its May 17 estimate.
Shimano’s net income in the three months ended June 30 rose 2.4 %, sales declined 1.4 %. The company didn’t provide quarterly results.

Shimano shares, which have risen 18 % this year, rose 2 %. The earnings statement was released after the 3 p.m. close of trading on the Osaka Securities Exchange.

Shimano’s profit margin, a measure of profitability, is the highest among bicycle and bicycle parts makers worldwide, according to data compiled by Bloomberg. The company’s profit margin more than doubled from Dec. 2001 to Dec. 2004. (Source: Bloomberg)

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