Nomura Holdings shares have fallen after profit dropped more than analysts anticipated last quarter, due to a loss in Europe and one-time costs tied to a major acquisition.
The stock slid as much as 5.3% on Monday morning in Tokyo, the biggest intraday decrease in more than nine months, before paring the decline to about 3.3%.
Net income dropped 9.7% from a year earlier to ?91.6 billion ($590 million) in the fiscal third quarter ended Dec. 31, Japan¡¯s biggest brokerage said Friday.
A share buyback wasn¡¯t enough to impress investors. The profit drop was also linked to crypto-related losses that overshadowed revenue growth in wealth management and equities trading.
¡°There is a vague sense of unease about the overall market direction, and that seems to have combined with the surprise on the crypto front to set off selling,¡± said Hideyasu Ban, a senior analyst at Bloomberg Intelligence, adding the market reaction is likely short-term in nature.
CEO Kentaro Okuda is seeking to extend the momentum that led to record profit last year, as financial firms compete to capitalize on Japan¡¯s market swings and investing boom. The stock market in Japan gained on Monday.
Nomura¡¯s results, while on course to beat the previous fiscal year¡¯s performance, were blemished by some factors.
There were one-time costs tied to the company¡¯s $1.8 billion purchase of a Macquarie Group asset manager, along with expenses associated with changes to a compensation scheme. Parts of both will also be booked in the current quarter, Chief Financial Officer Hiroyuki Moriuchi had said at a news briefing in Tokyo.
The losses in the crypto asset business also led Nomura to tighten risk controls there after the company¡¯s European operations swung to losses partly due to a setback in the digital-asset market, he said later on a call with analysts. Nomura has a crypto subsidiary in Switzerland.
¡°But overall we see this as a positive quarter, with our earning power steadily improving step by step,¡± Moriuchi said.
Nomura plans to buy back as much as ?60 billion of shares, or 3.2% of its outstanding stock.
Nomura¡¯s operations outside Japan earned ?16.3 billion before taxes, marking the 10th straight quarter of profit, but the level was about 70% lower than a year earlier due to the losses in Europe.
¡°Negative are the one-time losses,¡± said Mia Nagasaka, an analyst at Morgan Stanley MUFG Securities. ¡°Positives are that core business is solid and the firm announced a share buyback.¡±
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