Nikon Corporation ((NINOY)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Nikon Corporation’s recent earnings call revealed a mixed sentiment, reflecting both growth and challenges across its business segments. While the company experienced notable growth in imaging products, healthcare, and digital manufacturing, it faced significant hurdles in semiconductor lithography and industrial areas. The completion of a share buyback and a positive outlook for FY 2026 were tempered by major one-time costs and a reduction in dividends.
Revenue Increase in Imaging Products
The Imaging Products Business reported a revenue increase of ¥15.6 billion, reaching ¥295.3 billion. This growth was primarily driven by strong demand in China and the introduction of new wireless cameras, highlighting the segment’s robust performance.
Healthcare Business Growth
Despite facing challenges in life sciences, Nikon’s Healthcare Business achieved growth through eye care solutions and contract cell development manufacturing. This led to a higher year-on-year revenue, showcasing the segment’s resilience and potential.
Digital Manufacturing Expansion
The Digital Manufacturing Business saw a remarkable 33% year-on-year growth in sales of the NXG series, particularly within the aerospace and defense sectors. This expansion underscores Nikon’s strategic focus on digital manufacturing.
Share Buyback Completion
Nikon completed a ¥30 billion share buyback, contributing to a total shareholder return ratio of 765.8%. This move reflects the company’s commitment to enhancing shareholder value.
Decline in Semiconductor Lithography
The Precision Equipment Business faced a decline in sales of new semiconductor lithography systems, resulting in an overall revenue drop of ¥17.4 billion. This highlights the challenges in the semiconductor market.
Significant One-Time Costs
Nikon recorded ¥27.2 billion in one-time costs, which significantly impacted overall profit for FY 2025. These costs were a major factor in the financial shortfall experienced during the year.
Profit Decline in Components Business
The Components Business reported a revenue drop of ¥11.8 billion, with operating profit falling by ¥8 billion. This decline was attributed to reduced demand for EUV-related components and other parts.
Dividend Reduction
Due to the financial shortfall, Nikon revised its annual dividend downward by ¥5 to ¥50 per share. This decision reflects the company’s cautious approach in managing its financial resources.
Underperformance in Industrial Areas
The semiconductor market downturn and upfront investment burdens led to underperformance in industrial areas, impacting Nikon’s overall profitability.
Positive Outlook for FY 2026
Looking ahead, Nikon provided guidance for FY 2026, projecting revenue of ¥710 billion and operating profit of ¥36 billion. The anticipated significant increase in operating profit by ¥33.6 billion is driven by improved profitability and the absence of prior one-time costs. Despite expected growth in components and digital manufacturing, overall revenue is expected to remain flat due to a stronger yen and weaker sales in semiconductor lithography. Nikon aims for long-term growth, targeting ¥1 trillion in revenue and a 10% operating margin by FY 2030.
In conclusion, Nikon Corporation’s earnings call painted a picture of mixed fortunes, with growth in several segments counterbalanced by challenges in others. The company’s forward-looking guidance suggests optimism for the future, with strategic focuses aimed at achieving long-term growth targets.