FUJI ELECTRIC INDUSTRY CO.,LTD. FY2026 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥2.85B
• Operating Income: ¥173M
• Net Income: ¥145M
• EPS: ¥27.06

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Fuji Electric Industry Co., Ltd. (6654) reported FY2026 Q3 standalone results marked by revenue softness and pronounced margin compression. Revenue was ¥2,848 million, down 1.9% YoY, indicating a mild topline contraction. Gross profit was ¥996.9 million, translating to a solid gross margin of 35.0%, suggesting pricing and product mix remained resilient at the gross level. However, operating income dropped 40.4% YoY to ¥173 million, and operating margin contracted to 6.1%, highlighting significant deleveraging through SG&A amid a small revenue decline. Ordinary income outpaced operating income at ¥206 million, implying net non-operating gains offsetting part of the operating shortfall; interest burden is de minimis at ¥0.842 million. Net income was ¥145 million, down 30.8% YoY, with a net margin of 5.1% and EPS of ¥27.06. DuPont analysis points to a low ROE of 1.39%, driven primarily by muted asset turnover (0.251x) despite very low financial leverage (assets/equity of ~1.09x). The balance sheet remains exceptionally strong: total assets of ¥11,369 million against total liabilities of ¥835 million yields an implied equity ratio of roughly 92% (despite the reported 0.0% metric), and the current ratio is an ample 1,013%. Interest coverage is very high at ~206x, reflecting minimal debt risk. Cash flow details, depreciation, inventories, and cash balances are unreported in this disclosure, limiting cash conversion and capex assessments. The effective tax rate, inferred from taxes of ¥100.9 million and net income of ¥145 million, is approximately 41%, though the reported metric shows 0.0% due to disclosure gaps. Dividend per share is reported as ¥0 with a payout ratio of 0%, signaling a conservative stance or lack of interim distributions. Overall, the company exhibits strong solvency and liquidity but faces near-term profitability pressure and low ROE, with limited visibility on cash flow dynamics due to non-disclosure of key cash flow items.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 5.09%
• asset_turnover: 0.251
• financial_leverage: 1.09
• calculated_ROE: 1.39%
• commentary: ROE is constrained by low asset turnover and compressed operating margin; leverage is intentionally low, limiting ROE amplification. margin_quality:
• gross_margin: 35.0%
• operating_margin: 6.1%
• ordinary_margin: 7.2%
• net_margin: 5.1%
• observations: Gross margin is healthy, but SG&A intensity (~28.9% of sales) compressed operating margin materially. Ordinary income exceeded operating income, indicating supportive non-operating items. operating_leverage: Revenue declined 1.9% YoY, while operating income fell 40.4% YoY, indicating negative operating leverage and heightened sensitivity of profits to small topline changes. Cost discipline and variable cost alignment appear insufficient to offset the revenue dip.

Growth Assessment

revenue_sustainability: Topline decreased modestly (-1.9% YoY), suggesting soft demand or timing of deliveries/orders. Without order/backlog data, sustainability into Q4 is uncertain. profit_quality: Net margin of 5.1% and ordinary income above operating income indicate reliance on non-operating contributions; core profitability weakened. Inferred effective tax rate ~41% also weighed on bottom line. outlook: Absent guidance and order indicators, near-term growth appears constrained by margin pressure and operating deleverage. Stabilization requires SG&A containment and improved utilization/mix; any recovery in industrial demand could quickly lift earnings given high gross margin.

Financial Health

liquidity:

• current_assets: 6553712000
• current_liabilities: 647178000
• current_ratio: 1012.7%
• quick_ratio: 1012.7%
• working_capital: 5906534000
• commentary: Very strong short-term liquidity; inventories and cash balances are unreported, but ample current asset buffer versus current liabilities. solvency:
• total_assets: 11369000000
• total_liabilities: 834970000
• total_equity: 10460000000
• debt_to_equity: 0.08x
• interest_coverage: 205.5x
• equity_ratio_inferred: ~92%
• commentary: Minimal leverage and outstanding coverage indicate low financial risk and high resilience. capital_structure: Predominantly equity-funded with negligible interest-bearing debt; capacity exists to deploy balance sheet for strategic investment if needed.

Cash Flow Quality

earnings_quality: Unable to assess cash conversion due to unreported operating cash flow and depreciation. The absence of D&A data also precludes EBITDA analysis. free_cash_flow:

• ocf: None
• capex: None
• fcf: None
• commentary: FCF cannot be determined from the provided disclosure; monitoring future filings is necessary. working_capital: Large positive working capital supports operations, but without inventory and receivables details, efficiency and cash tie-up cannot be evaluated.

Dividend Sustainability

payout_ratio_assessment: DPS is reported as ¥0 and payout ratio at 0%, implying retention of earnings. EPS is ¥27.06, indicating capacity to pay, but policy appears conservative. fcf_coverage: Not assessable due to unreported cash flows; FCF coverage metric is therefore not meaningful. policy_outlook: Given low ROE and emphasis on balance sheet strength, management may prioritize reinvestment or reserves. Any future distributions would likely track earnings recovery and visibility on cash generation.

Risk Assessment

Business Risks:

• Demand cyclicality in industrial and factory automation end-markets
• Customer capital expenditure timing affecting order intake and shipment schedules
• Price competition and input cost fluctuations impacting gross margin
• Product mix shifts reducing operating leverage
• Supply chain lead times and component availability risk

Financial Risks:

• Low ROE relative to equity base may invite pressure to optimize capital allocation
• Potential working-capital build in downturns if inventories/receivables rise (details unreported)
• Tax rate volatility affecting net income
• Dependence on non-operating income to support ordinary profit

Key Concerns:

• Sharp YoY decline in operating income (-40.4%) on mild revenue softness
• Low asset turnover (0.251x) and subdued ROE (1.39%)
• Limited visibility on cash flow generation due to non-disclosure of OCF and capex

Investment Implications

Key Takeaways:

• Solid gross margin (35.0%) but significant SG&A drag compressing operating margin to 6.1%
• Very strong balance sheet with inferred equity ratio around 92% and current ratio over 10x
• Low ROE driven by modest margins, low asset turnover, and deliberately low leverage
• Non-operating gains partially cushioned operating weakness; interest burden minimal
• Cash flow and capital intensity cannot be assessed from current disclosure

Metrics to Watch:

• Order backlog and book-to-bill ratio
• Gross margin trajectory versus raw material and pricing trends
• SG&A as a percentage of sales and operating margin recovery
• Asset turnover improvement and utilization rates
• Operating cash flow to net income ratio and working-capital movements
• Capex intensity and depreciation once disclosed
• Dividend policy signals and capital allocation plans

Relative Positioning: Balance sheet strength is a clear positive relative to peers, but profitability and ROE are currently below typical small-cap industrial benchmarks in Japan; improvement hinges on margin recovery and better asset utilization.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis