Kawasaki Heavy Industries (7012) Q1 2027 earnings summary

Executive summary

• Revenue for Q1 FY2026 reached a record ¥543.6 billion, up 11.3% YoY, with business profit rising to ¥35.8 billion (+74.3% YoY) and profit attributable to owners surging 269% to ¥15.7 billion, driven by strong segment performance, IEEPA tariff refunds, and yen depreciation.

• Comprehensive income increased sharply to ¥26.2 billion from ¥3.1 billion YoY.

• Upward revision of full-year business profit forecast to ¥180.0 billion, reflecting robust Q1 results and improved external environment.

Financial highlights

• Q1 FY2026 revenue: ¥543.6 billion (+¥55.1 billion YoY); business profit: ¥35.8 billion (+¥15.2 billion YoY, margin 6.6%).

• Profit before tax: ¥34.7 billion (+¥17.9 billion YoY); profit attributable to owners: ¥15.7 billion (+¥11.4 billion YoY).

• Gross profit margin improved to 20.3% from 18.8% YoY; gross profit rose to ¥110.1 billion from ¥91.8 billion.

• Basic earnings per share rose to ¥18.74 from ¥5.07, reflecting a 5-for-1 stock split.

• Free cash flow slightly negative in Q1, but expected to turn positive for the full year; net cash used in operating activities was ¥12.3 billion.

Outlook and guidance

• FY2026 business profit forecast raised to ¥180.0 billion (+¥10.0 billion vs previous), margin target 7.0%.

• Revenue forecast maintained at ¥2,560.0 billion (+10.8% YoY); profit attributable to owners forecast at ¥115.0 billion (+6.3% YoY).

• Basic EPS forecast for the year is ¥133.12, adjusted for the stock split and new share issuance.

• FX assumption unchanged at ¥150/USD; risk buffer included for Middle East and tariff uncertainties.