Takata, the Japanese auto safety equipment maker whose potentially defective air bags have been linked to four deaths in the United States, is likely to warn of a bigger full-year loss when it reports quarterly results later on Thursday.
The company's air bags, used by many leading car makers, are the focus of a U.S. regulatory probe and have prompted the recall of some 17 million cars worldwide in recent years.
Takata, which has 22 percent of the global market for air bag inflators - the explosive device that allows the air bag to inflate in a fraction of a second in the event of a crash - has already set aside 75 billion yen ($655 million), around enough to cover the recall of up to 9 million cars. Two people familiar with the matter have said the company may book another 2-3 billion yen charge for the July-September quarter to help cover additional recalls.
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Osaka-based Daicel, a local rival that makes air bag inflators, also announces July-September earnings on Thursday. Its shares have jumped by as much as a quarter in the past two weeks - valuing the company at over $4.1 billion - on hopes it can win automakers' business away from Takata.
As uncertainty remains over potential future recalls and the likely cost of a growing number of legal cases against Takata and some automakers, including Honda Motor, its biggest customer for inflators, shares in Takata have almost halved in value since January.
By most financial metrics, Takata is the worst performer among more than 100 Japanese auto parts makers.