What triggered a stock price reversal due to an increase in NTT's 1Q financial results? Moving forward to 14 consecutive dividend increases [financial results preview]

The market anticipates an increase in profits, and there is an urgent need to sort out “negative legacies” such as landline phones
Of the previous semesterSales, operating profit, and net profit all hit record highs in the financial results for the fiscal year ending March 31, '24I did it. The forecast for the fiscal year ending 25/3 shows an increase in sales and profit, and sales are expected to increase 0.6% from the previous fiscal year to 13 trillion460 billion yen, operating profit down 5.9% to 1 trillion810 billion yen, net profit down 14.0% to 1 trillion 100 billion yen, and EPS is expected to be 13 yen.
The main reason for the decline in operating income was the regional telecommunications business by NTT East/West Japan, and the estimated decrease in profit compared to fiscal year 23 rises to minus 147.7 billion yen, which exceeds the profit reduction amount for NTT as a whole. NTT is proceeding with structural reforms such as the transition from “legacy services” such as voice (metal line) communication and unused lines (dry copper-).It is expected that fiscal year 24 will be the bottom in terms of profit for the regional telecommunications business。
However,The market anticipates an increase in profit compared to the company's earnings outlookDoing it.
The analyst consensus on Bloomberg's earnings forecast for the first quarter is that sales are 3 trillion172.9 billion 80 million yen, operating income is 482.4 billion 35 million yen, net profit is 318.7 billion 51 million yen, and EPS is 3.20 yen.The ratio of market forecasts compared to the full-year forecast announced by the company is equivalent to sales of 23.6%, operating profit of 26.7%, and net profit of 29.0%I'll do it. In terms of profit, it is above the figure obtained by dividing the full-year forecast into 4 equal parts, and there are many views in the market that profits will rise above the company forecast.

DOCOMO expects additional effects from the two securities and credit sales companies it acquired in the previous fiscal year
What should be placed the most emphasis on when looking at NTT's financial results is NTT DOCOMO, which is the core of the comprehensive ICT segment, which earns about 40% of sales and about 60% of operating profit.

While DOCOMO's market share in the mobile phone business continues to decline, it is expanding its economic zone centered on points that lag behind other mobile carriers, and is trying to diversify profits.

In particular, it is the only one of the four mobile carrier-based economies that does not have its own bankRegarding the financial business, DOCOMO leveraged rapid acquisitions in rapid successionI'm trying to do it.Monex Securities was invested in 48.6 billion yen in January '24, and Orix Credit, a credit sales company, was placed under the umbrella of the credit sales company Orix Credit with 79.2 billion yen in March, respectively. The sales and profits of the two companies will all be reflected in the financial results for the current fiscal year. According to the Official Gazette Settlement Service, ORIX Credit's financial results for fiscal year 23 were sales of 32.5 billion 66 million yen, operating income of 9.1 billion 24 million yen, and net profit of 6.8 billion 47 million yen. Monex Securities' financial results for fiscal year 23 were sales of 36.7 billion 31 million yen, ordinary income of 5.5 billion 85 million yen, and net profit of 3.4 billion 9 million yen. From the first quarter, the performance of the two companies will be added as is.
Also,Collaboration on payments and points with Amazon, a major EC mall company, will begin in AprilIt is being done, and attention is being paid to how much the synergistic effect will lead to profit.

Is the “engine of growth” data center business boosting business performance
The current earner at NTT is DOCOMO, but sales increased the most in fiscal year 23,NTT DATA is expected to boost operating profit the most this fiscal yearIt is a global solutions business centered around. The same business plans to increase operating profit by 8.5% and 24.6 billion yen in fiscal year 24 compared to fiscal year 23 compared to fiscal year 23. Above all, alreadyThe data center business, which is the 3rd largest in the world, is positioned by NTT as a “driving force for growth”. Sales of the data center business in fiscal year 24 are expected to increase 17.1% from 1.869 billion dollars (270.3 billion yen) in fiscal year 23 to 2.189 billion dollars. Investments are also planned to be actively carried out, and the investment amount for fiscal year 24 is planned to be at the same level as 2.7 billion dollars (390.5 billion yen) in fiscal year 23.

Has there been no change in the dividend increase forecast for the 14th consecutive term?
Earnings for the full year are forecast to decline, but dividends per share are 5.2 yen, an increase of 0.1 yen from the previous fiscal year, and dividends are expected to increase for 14 consecutive terms. Based on the full-year earnings forecast, the dividend payout ratio is expected to rise from 33.8% in fiscal year 23 to 40.0%.
NTT says “the basic idea is to implement continuous dividend increases,” and it seems that dividend increase forecasts will not be reviewed unless there is a significant downturn in business results.

Keep an eye on stock price movements after financial results are announced, and price movements are intense due to an increase in individual investors
NTT split 1 share into 25 shares in 2023/7. Along with this, the price of a unit stock fell below 0.02 million yen, which led to an expansion of investors. According to NTT, as of the end of March '24,The number of shareholders doubled from 0.92 million before the split to 1.86 million. The number of individual investors in their 40s and under, which was about 10% at the end of 2020, increased to about 40%It is said that they did.
While the increase in the number of individual investors increases the liquidity of NTT shares, it also intensifies price movements in stock pricesTrends are also being seen. After adding 185 yen at the end of March, the stock price fell more than 20% to 144 yen in mid-June. After that, the price was raised by 10% or more and returned to 159 yen in early July, but it has now plummeted to the 152 yen range. It seems that the causes of such intense price movements also include the phenomena of “selling invites selling” and “buying invites buying.” If there is even a slight surprise element in the details of the financial results announcement this time, there is also a possibility that stock prices will move drastically.