OFFICIAL /r/investing TEPCO Q3 Earnings Circlejerk & Bagholder Support Thread PLUS BoJ Monetary Policy Statement!

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joshuasamuelquiroz

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UPDATE: BANK OF JAPAN ADOPTS NEGATIVE INTEREST RATE POLICY, USD/JPY THROUGH THE ROOF

UPDATE: USD/JPY rises 1.41%; TEPCO up 4.17% at the close; Nikkei 225 up 2.80% at the close

UPDATE: TEPCO reports 71.1 billion Yen ordinary income for Q3

UPDATE: You can read the Google Translate-mangled financial results here

UPDATE: It appears the consensus among Japanese analysts was 18.8 billion Yen. This sucker gonna pop on Sunday.

Are y'all long on popcorn futures? Have you mortgaged your homes? Or still below 80% portfolio allocation? You better sack up, son.

Coming up first tonight, we've got the Bank of Japan policy announcement. There's some anticipation we may see further easing, since metrics are pointing to a huge undershoot of Kuroda's 2% inflation target. Statements have historically been released between 11:30 am and 12:30 pm Japan Standard Time, which is 9:30-10:30 pm on the East Coast and 6:30-7:30 pm on the West Coast. This statement could have material impact on the Nikkei 225 and on USD/JPY (although we've all hedged that risk, right guys?)

After market close at 3pm Japan Standard Time (1 am East Coast, 10pm West Coast), we are expecting Q3 TEPCO earnings. For those of you not familiar with their accounting habits, they don't break out quarterly performance, everything is always presented year to date. To get the quarterly numbers you need to subtract the values for the previous quarter, which you can find here: http://www.tepco.co.jp/en/corpinfo/ir/tool/presen/pdf/151029_1-e.pdf

Keep in mind that TEPCO's financial year starts in April, so Q3 is October-December. Also, TEPCO hasn't been very good about releasing the earnings in English in a timely fashion, so keep your Google Translate handy (if there are any native Japanese speakers around, your services would be much appreciated). Here's the Japanese IR site.

The patented VycidCast™ for ordinary income is 71 billion Yen. If anybody else has got numbers let's get a consensus opinion going.

Here's some of the nitty-gritty:

October electricity sales: 19715190 MW-h

November electricity sales: 20177660 MW-h

December electricity sales: 22995780 MW-h

Oct-Dec electricity sales: 62888630 MW-h

Oct-Dec revenue projection: 1.327 trillion Yen

LNG price in October: $7.6 / MMBTU

LNG price in November: $7.4 / MMBTU

LNG price in December: $7.4 / MMBTU

October electricity statutory 290kW-h rate: 7481 Yen

November electricity statutory 290kW-h rate: 7518 Yen

December electricity statutory 290kW-h rate: 7518 Yen

Ladies & Gentlemen: TEPCO, the one true asset.

Good luck all. YOLO. GET HYPED.

Japanese TEPCO symbol: 9501

US OTC Symbol (market closed): TKECF

Nikkei 225

USD/JPY

Update: Median consensus earnings forecast updated to 85.5 billion Yen (71, 100)
 
@resjudicata TEPCO was bailed out by the Japanese government back in 2012, following the Fukushima disaster in 2011 - their liabilities from that disaster threatened to bankrupt them, but the government has assumed most of the responsibility. After that disaster, all of the nuclear plants in the country were shut down, seriously hurting the profit margins of the utility companies (Japan was very dependent on nuclear power), and those plants have only recently started to come back online.

The ruling party in Japan has expressed very strong support for nuclear power, and this party has been in power for almost 60 years with only a couple of brief interruptions, so their policy is basically Japan's policy.

Because of falling global fuel prices, TEPCO has already turned into a cash machine, and when their nuclear plants come back online (they have two viable plants remaining, one of which is the largest in the world) cash flow will just get even more ridiculous. That's the story, basically, although there's obviously a lot more nuance to it.

Easing tends to prop up asset prices, since yields on fixed income go down - so either the equity risk premium expands, or equity prices have to increase (plus, companies stand to save money on debt service when rates decrease).

Also, the BoJ is signaling intent to do whatever is necessary to keep inflation positive going forward - most participants thought there would be no action today.
 
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