Investors Watch Nova Circle the Drain

When was the last time you saw some good press about Nova? I can't remember either, but I suspect that Sahashi breathed a sigh of relief when Nova's share price didn't move much in light of it's poor first quarter performance. When trading opened today, the Nikkei reporting that investors were watching Nova's stock circle the drain. It seems that they realized that the METI sanction in June would hurt Nova and factored that into their forecasts. In other words, they already knew that the financial results released last Friday would be ugly.

Here's a translation of the blurb just after trading began:

Nova shares lower on news of first quarter losses

With shares opening at 49 yen, down two yen from last week's close, Nova's share price looks to remain in the doldrums. The release of first quarter earnings on the 24th revealed Nova slumping on sales of 9.2 billion yen, down 32% from the previous year, and losses of 4.3 billion yen. There are no signs at present [just after trading began] that investors are selling off Nova shares in a move that would further drive the price down. Investors apparently saw the news of Nova's administrative punishment in June as damaging to its image and subsequently took into account the rapid increase in the number of students canceling their contracts.

Nova's annual forecast remains unchanged with a projected sales of 52.8 billion yen, down 7% from the previous year, and a profit of 300 million yen, but as reported in the August 25th morning edition of the Nikkei Shimbun, Nova's going to have a hard time reaching its projection for getting back in the black by next March if it's forced to set aside more money for refunds in the face of growing demands. The consensus is that while today's drop is limited, the share price will continue to remain weak until there are definite signs that business is improving.

Original article:　NＯＶＡが小安い――４―６月期の大幅赤字は織り込み(2007/08/27 09:45)

（９時15分、コード4655）前週末24日終値に比べ２円安の49円で寄り付き、その後も小安い水準でもみ合っている。24日に発表した４―６月期連結業績は、売上高が前年同期比32％減の92億円に落ち込んだほか、経常損益は43億円の赤字となるなど不振が鮮明だったが、改めて下値を売り込むような動きは現時点で見られない。投資家は、６月に受けた行政処分によるイメージ悪化と、それに伴う解約者数の急増は織り込み済みと受け取ったようだ。

2008 年３月期通期は売上高が前期比７％減の528億円、経常損益が３億1500万円の黒字とする従来予想を据え置いたが、増加している解約金の返還請求に備える売上返戻引当金の積み増しを迫られれば損益はさらに悪化するため「達成は容易ではない」（25日付日本経済新聞朝刊）。きょうの下値は限定的だが、業績回復が明確になるまでは弱含みの展開が続くとの見方は多い。