Daiichi Sankyo Company (4568) Q1 2027 earnings summary

Executive summary

• Q1 FY2026 revenue rose 21.1% year-over-year to JPY 574.7 billion, driven by strong sales of ENHERTU and DATROWAY and favorable foreign exchange effects.

• Core operating profit increased 6.2% to JPY 107.3 billion, but operating profit declined 12.0% to JPY 85.1 billion due to higher restructuring expenses in the EU Specialty Business Unit.

• Profit attributable to owners dropped 19.7% to JPY 68.6 billion, mainly due to higher income taxes and financial expenses.

• Correction of FY2025 results due to booking errors in accounts payable and SG&A; internal controls deemed effective overall, with measures underway to prevent recurrence.

• Total comprehensive income rose 28.5% to JPY 87.7 billion, reflecting positive currency translation differences.

Financial highlights

• Q1 FY2026 revenue increased by JPY 100.1 billion year-over-year, with a JPY 41.9 billion positive forex impact.

• Core operating profit up JPY 6.3 billion (6.2% YoY) to JPY 107.3 billion; operating profit down JPY 11.6 billion (12.2% YoY) to JPY 85.1 billion.

• Cost of sales increased 43.9% YoY to JPY 126.0 billion, and SG&A expenses rose 25.5% to JPY 226.0 billion, mainly from higher profit sharing with AstraZeneca.

• R&D expenses grew 9.0% to JPY 115.5 billion, reflecting intensified investment in ADCs and pipeline projects.

• Profit attributable to owners down JPY 16.9 billion YoY to JPY 68.6 billion; EPS down 18.1% to JPY 37.72.

Outlook and guidance

• FY2026 revenue forecast raised by JPY 60 billion from May to JPY 2.34 trillion, reflecting yen depreciation and strong ENHERTU sales.

• Core operating profit guidance unchanged at JPY 360 billion; operating profit and profit before tax raised by JPY 5 billion each.

• Profit attributable to owners forecast at JPY 251 billion, reflecting tax deduction adjustments and higher expected income taxes.

• Annual dividend forecast increased to JPY 100 per share, up JPY 22 from the prior year.

• FY2026 EPS forecast revised down to JPY 137.94 due to higher tax rate and increased SG&A expenses.