Kaga Electronics Co (8154) Q3 2025 earnings summary

Executive summary

• Net sales for FY2025/3 3Q decreased 2.5% year-over-year to ¥396.2 billion, mainly due to inventory adjustments and the end of transactions with a major overseas customer in the electronic components segment.

• Operating income dropped 11.9% year-over-year to ¥18.0 billion, impacted by wage hikes and higher logistics costs.

• Net profit declined 20.5% year-over-year to ¥12.7 billion, reflecting the absence of prior-year one-time gains from investment securities and acquisitions.

• Recovery is underway as inventory adjustments at major customers are being resolved, with net sales and operating income rebounding to prior-year levels in the third quarter.

Financial highlights

• Gross profit was nearly flat year-over-year at ¥52.2 billion, with a gross margin of 13.2%.

• EPS for the period was ¥241.97, adjusted for a two-for-one stock split effective October 1, 2024.

• Ordinary income decreased by 9.5% year-over-year to ¥18.4 billion.

• Comprehensive income for the period was ¥17.8 billion, down from ¥20.7 billion a year earlier.

• Exchange rate effects contributed ¥16.9 billion to net sales and ¥488 million to operating income.

Outlook and guidance

• Full-year forecasts remain unchanged: net sales of ¥555.0 billion (+2.3% YoY), operating income of ¥26.0 billion (+0.6% YoY), and net profit of ¥18.0 billion (-11.5% YoY).

• EPS forecast for the year is ¥342.53.

• Annual dividend forecast is ¥110 per share, reflecting the stock split; year-end dividend is ¥55 per share post-split.

• Recovery scenario is intact, with gradual easing of inventory adjustments across industries.

• Management notes that actual results may differ due to various risks and uncertainties.