SMC (6273) Q1 2026 earnings summary

Executive summary

• Net sales for FY25 Q1 were ¥200.1B, down 1.3% year-over-year, reflecting sluggish demand and global economic uncertainty.

• Operating profit declined 15.1% year-over-year to ¥44.4B, mainly due to higher cost ratios and increased depreciation.

• Net profit fell 28.1% year-over-year to ¥34.6B, impacted by foreign exchange losses and inventory devaluation.

• Comprehensive income dropped to ¥24.8B from ¥108.9B a year earlier, mainly due to negative currency translation adjustments.

• Sales quantity increased 3.4% year-over-year, but negative exchange rates and inventory devaluation impacted results.

Financial highlights

• Gross profit margin decreased to 44.3% from 47.7% year-over-year; gross profit was ¥88.7B, down from ¥96.7B.

• R&D expenses rose 11% year-over-year to ¥9.0B; depreciation increased to ¥9.5B.

• Cash and deposits increased 2% to ¥669.1B; investment securities fell 34.9% to ¥82.9B.

• Equity ratio remained high at 91.1%; ROE at 1.8% (annualized 7.2%).

• Basic EPS for the quarter was ¥543.79, compared to ¥759.43 in the prior year.

Outlook and guidance

• FY25 net sales forecast at ¥850.0B, with 23.6% progress achieved in Q1; operating profit forecast is ¥215.0B, with 20.7% progress.

• Full-year forecast for fiscal 2026 remains unchanged: net sales ¥850.0B, operating profit ¥215.0B, net profit ¥167.0B, and basic EPS ¥2,620.27.

• Dividend forecast for fiscal 2026 is ¥1,000 per share, unchanged from the previous year.

• Management notes projections are subject to risks and market fluctuations.