Alps Alpine (6770) Q2 2027 earnings summary

Executive summary

• H1 net sales rose 7.4% YoY to ¥542.964bn, while operating profit fell 37.8% to ¥13.206bn and net income fell 77.8% to ¥2.952bn.

• Profitability was pressured by higher memory costs and an ¥8.889bn product-warranty loss; a ¥6.048bn gain on investment securities partly offset extraordinary charges.

• Q2 revenue exceeded plan, led by Mobility, and operating income beat forecast partly on yen weakness; FY guidance remained unchanged.

Financial highlights

• 1H net sales increased ¥37.2bn YoY; favorable FX contributed ¥39.7bn.

• Operating income fell ¥8.0bn YoY; FX added ¥2.6bn, offset by higher memory prices, fixed costs, R&D costs and other factors.

• Ordinary profit declined 44.1% to ¥13.804bn; profit before income taxes was ¥10.482bn versus ¥24.201bn YoY.

• Gross profit was ¥89.130bn versus ¥89.640bn YoY; SG&A increased to ¥75.924bn from ¥68.418bn.

Outlook and guidance

• FY2026 forecasts remain unchanged: net sales ¥1,045bn, operating profit ¥48.5bn, ordinary profit ¥45.5bn and net income ¥30bn.

• 2H operating income is forecast at ¥35.3bn versus ¥13.2bn in 1H; operating margin is forecast at 7.0% versus 2.4% in 1H.

• 2H Mobility profit is expected to rise on price adjustments, including recovery of 1H memory-cost increases; additional cost increases are to be offset through further pricing.

• FY2027 dividend forecast remains ¥64 per share, including ¥32 at the interim date; basic EPS forecast is ¥150.41.

• 2H FX assumptions: US$1=¥150, €1=¥180 and CNY1=¥21; full-year assumptions are ¥154.69, ¥182.18 and ¥22.26, respectively.