This is the biggest single-day drop that the stock has seen in 25 years. The last drop of such an extent was seen back in 2000.
Murata, who produces multilayer ceramic capacitors, expects its net profit to fall by a quarter (24%) for the financial year that will end in March 2026. It attributed the fall to sluggish demand for components used in cars and smartphone components, along with Donald Trump’s tariffs. A stronger Yen also weighed on the forecast.
The company has also warned of a further decline in earnings. It added that its forecast does not account for any impact from the US tariffs. “Every percentage that demand drops below our forecast means ¥5 billion less revenue,” President Norio Nakajima said on an earnings call.
Shares of Murata are down to a five-year low in Tokyo. The company is seen as a leading indicator of consumer electronics demand as its components are used in nearly all electronic devices made by Apple, Samsung, Nvidia and even Sony’s game consoles.
This year may be “considerably worse” than projections, said Pelham Smithers of Japan-focused equity research house Pelham Smithers Associates. While the company has done well from the AI server boom, “even there, question marks now exist,” he said.
(With Inputs From Agencies)
