By Michael Kitchen
LOS ANGELES (MarketWatch) -- Japanese earnings season swings
into high gear next week, with the likes of Sony Corp. and Sharp
Corp. set to report, while South Korean chip-maker results and what
may be Hong Kong's biggest-ever initial public offering are also on
the schedule.
Sony's (SNE) results are due out Friday after the market close.
Analysts polled by FactSet expect net income at the consumer goods
firm to slip to 12.23 billion yen ($150.8 million), from
¥25.74 billion in the year-ago quarter, and swinging from a
year-earlier loss of ¥26.3 billion. Sales, however, are
expected to increase to ¥1.76 trillion in the July-September
quarter, up from ¥1.66 trillion in the year- earlier
period.
Also Friday, Honda Motor Co. (HMC) will announce results, with
analysts polled by FactSet expecting quarterly net income of
¥175 billion, down from ¥272 billion in the April-June
period, but well above the ¥54 billion it earned in the
year-earlier period. And on Thursday, Sharp's (SHCAF) earnings are
due out, with a Dow Jones Newswires survey projecting group profit
to fall to ¥5.38 billion from the year-earlier quarter's
¥7.48 billion profit.
A key issue for these and other export-focused Japanese
companies is the value of the yen, which is nearing its all-time
high against the dollar.
Analysts will be watching to see how the companies adjust their
foreign-exchange assumptions in their outlooks. In a report this
past week, the Nikkei business daily said Honda will likely trim
its assumed dollar rate from ¥85 down to "around ¥80"
or lower, while Sony will cut its assumed rate from an optimistic
¥90 to "the low ¥80s."
The world's two top chip makers are also set to report earnings
next week, with Samsung Electronics Co. (SSNLF) and Hynix
Semiconductor Inc. lifting their respective veils on Friday and
Thursday.
Despite falling chip prices, both firms are tipped to do well.
According to Dow Jones Newswires, Samsung -- which is both the No.
1 chip maker and overall No. 1 tech firm by revenue -- is expected
to post a 16% year-on-year rise in profit, while Hynix is seen
quadrupling its year-earlier profit, thanks to a strong expansion
in sales.
On the economics front, the Bank of Japan will hold a policy
meeting Thursday, on the heels of its surprise policy-rate cut on
Oct. 5. In the past week, the central bank's governor, Masaaki
Shirakawa, suggested in an interview with the Asahi Shimbun
newspaper that more easing could be in the works, in the form of
expanding a special fund for adding liquidity to the economy.
While such action may be unlikely so soon after the Bank of
Japan's actions earlier this month, the bank's economic report --
due out at the same time -- could draw attention if the BOJ
downgrades its forecasts, as some economists expect.
On Wednesday, Australia will release its third-quarter consumer
price index, and this has monetary policy implications as well.
After a very strong set of employment data earlier in the month,
the Reserve Bank of Australia looks increasingly likely to hike
interest rates next month. However, a weaker-than-expected
inflation reading next week could push the RBA to extend its
tightening pause.
Rounding out a busy week for Asian markets, Hong Kong will see
the trading debut of what could be its biggest IPO on record.
American International Group Inc.'s (AIG) Asian insurance unit,
AIA Group, has priced the issue at the top end of its indicative
range and exercised an upsize option to pull in a total haul of
$17.8 billion, according to Dow Jones Newswires.
This would make it the largest-ever IPO in Hong Kong history,
and would be the world's second-largest this year after
Agricultural Bank of China Ltd.'s dual Shanghai and Hong Kong
IPO.