Japex Drops in Tokyo on Profit Outlook, Nomura Rating

By Shigeru Sato

Feb. 12 (Bloomberg) -- Japan Petroleum Exploration Co., the country’s second-biggest oil and gas developer, fell the most in two months in Tokyo after it slashed the outlook for full-year profit and Nomura Securities Co. cut the stock’s rating.

Japan Petroleum, better known as Japex, tumbled 8.1 percent to 3,650 yen a share at the 11 a.m. morning break, the biggest fall since Dec. 2.

The Tokyo-based energy explorer reduced its full-year profit outlook for a second time in four months on Feb. 10 after oil’s 61 percent plunge in a year. Nomura Securities yesterday cut its rating to “neutral” from “buy.”

“The bleak outlook for Japex’s short-term earnings is imperiling the stock’s upward momentum,” Shigeki Matsumoto, an energy analyst at Nomura in Tokyo, said in his Feb. 11 note. “We are looking for Japex to implement cost-cutting measures as it may post lower earnings” in the year starting April.

Nomura estimates Japex’s net income will drop to 4.1 billion yen ($45.5 million) next fiscal year from estimated profit of 11.6 billion yen for the year ending March 31, the note said.

Japex cut its oil import price outlook to $45 a barrel for the quarter ending March 31 from its November projection of $55, the explorer said on Feb. 10.

Crude oil in New York has dropped 76 percent from a record $147.27 a barrel on July 11 as the worst financial crisis since the Great Depression eroded demand. Oil was trading at $36.04 a barrel in electronic trading on the New York Mercantile Exchange at 11:28 a.m. Tokyo time.

To contact the reporter on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net.