Shares of Nippon Telegraph and Telephone (NTT +0.3%) tick up after news hits that that the Japanese government, which owns roughly one-third of shares, will sell part of its NTT stake to fund stimulus plans.
NTT Communications, the long-distance and overseas calling unit of Nippon Telegraph & Telephone (NTT), has agreed acquire Denver-based Virtela Technology for $525M.
The acquisition of Virtela will enable the Japanese company to offer worldwide data services without having to license cables and lines in individual markets.
NTT will also buy an 80% stake in RagingWire, another provider of data services, for $350M. RagingWire generates annual revenues of $85M and a compounded annual growth rate of 30%. The deal will more than double NTT Com's data-center space in the U.S.
Japanese stocks opened lower today, tracking a flat session overnight on Wall Street. The Nikkei Average is currently down 0.2% to 8,913: Nippon Telegraph & Telephone (NTT -1.3%), NTT DoCoMo (DCM -0.2%), Softbank (SFTBY.PK -0.8%), and KDDI (KDDIY.PK -0.4%).
NTT's (NTT) FQ3 net profit dives 56% to ¥62.76B ($819.3M), due to write-down in tax assets. Operating profit -4.3% to ¥323.95B and revenues +3.2% to ¥2.629T. For FY 2012, NTT cuts its net profit outlook, and it now expects a fall of 8.8% to ¥465B vs. an earlier projection of ¥545B. (PR)
Japanese stocks open slightly higher after a relatively flat trading day Wall Street overnight. The Nikkei Average is up 0.22% with telecom and pharmaceutical shares among the gainers: Daiichi Sankyo (DSKYF.PK +1.9%), Takeda Pharmaceutical (TKPHF.PK +1.9%), Softbank (SFTBY.PK +1.9%) and Nippon Telegraph & Telephone (NTT +2.2%).
The Nikkei is -5.7% at 1:00 PM Japan time, its low of the day. Manufacturers are being hit hard, including Toshiba (TOSBF.PK) -16.3%, Hitachi (HIT) -15%, Nissan (NSANY) -9.2%, Sony (SNE) -8.5%, Toyota (TM) -8%, Panasonic (PC) -8.2%, and Honda (HMC) -5.7%. Other losers include Nomura (NMR) -9.1%, Yahoo Japan -6.2%, and Nippon Telegraph and Telephone (NTT) -5.5%. Many firms are still trying to assess the condition of their plants and how potential power cuts might affect them.
Last year, SSBT OD05 Omnibus Account Treaty Clients appeared as a top 10 shareholder in several major Japanese companies. Behind SSBT? China, which has stealthily built stakes in firms like Mitsubishi Financial, Canon, Sony, and Tokyo Electric, among others.
Japan's government opposes a proposed 'structural' breakup of Nippon Telegraph & Telephone's Corp.'s (NTT -1.0%) fiber-optic business. Softbank Corp. (SFTBF.PK) has requested this to speed adoption of broadband 'net access in Japan. Rather, the government requests a 'functional' separation, which Softbank claims will be 'ineffectual.'