Nikon Corp. Q3 FY2017 Headlines (Oct 1, 2016, to Dec 31, 2016)
- Overall company Operating Income up +83%
- Overall company Net Sales up +2%
- Imaging Products segment Net Sales fall -23%
- Imaging Products segment Operating Income falls -51%
- Restructuring takes its toll with expenses up to ¥53B
- Troubled and delayed DL range of Digital Cameras - scrapped
Overall Company Results
NIKON Corp. released their Q3 FY2017 results after giving notice of ‘extraordinary loss’ and voluntary redundancy for 1000 older workers. Restructuring the business as outlined in the previous results has come at a cost and the pain is not over yet.
Restructuring is fine if there is a clear plan as to the future direction of the business. With the digital camera market still in free-fall, investors will want to know how the company will maintain its market. The complete abandoning of a segment of cameras that is thought to be one of the more profitable, premium compacts, with the scrapping of the ill-fated DL range will leave people ‘scratching their heads’.
Investors were not impressed and shares fell 15% losing most of the gains made in the last 3 months due to an improving ¥en exchange rate.
Looking at the overall business of Nikon we see a company with rising Net Sales by +2% and improving Operating Income by +83%. This income represents 8.5% of Net Sales and that is a big improvement on the previous year where it was just 4.7%.
Let’s take a look at the overall business structure to see the losses and gains in each sector.
H1 FY2017 Headlines (Apr 1, 2016 to Sep 30,2016)
- Overall company Operating Income up +56%
- Overall company Net Sales fall -13.8%
- Imaging Products segment Net Sales fall -32%
- Imaging Products segment Operating Income falls -37.2%
Overall Company Results
NIKON Corp. released it’s H1 FY2017 results at a time of great volatility in global markets just a day before the election of Donald Trump as US President. Stocks were down -6.56% on the first day of trading but it’s difficult to attribute blame in this instance.
Looking at the overall business of Nikon we see a company with falling Net Sales by -13.8% but improving Operating Income by +56%. This income represents 6.8% of Net Sales and that is a big improvement on the previous year where it was just 3.7%.
So Nikon despite a difficult year has been able to cut costs and produce better value for investors. However, these results miss the latest previous forecast on Net Sales by -4.5% but improve on Operating Income by +1.3%. This previous forecast was already for a 10% drop so Net Sales are a problem.
Nikon remain a solid profitable company that has a long history in technology and a following that is loyal and supportive. There are severe underlying issues that have yet to be fully addressed and hence the management have ditched their Medium Term Plan and set in motion a new 3 year recovery plan. Let’s take a look at the overall business structure to outline the issues.
Nikon has just released its Financial Results for Q1 FY2017/3 that cover sales to the 30th June 2016. Given the current difficulties the Camera Industry is going through it will be interesting to take a closer look at the data and comments.
- Previous Forecast
- Overall Business Results
- Imaging Segment
- Camera Market Share
- Future Forecast
NIKON CORPORATION is a major Japanese company that has built a reputation as a maker of very desirable cameras. During the latter part of the 20th century they became the Icon of the industry and for many they are still the ‘go to’ brand for Digital Cameras.
Nikon is an independant public company who are 'affiliated' to the large Mitsubishi Organization. Major shareholders are Japanese Banks and Institutions but also there are a high percentage of both Japanese and Foreign Private Investors.
The business is split into 4 sectors:
Bloomberg noted that Nikon has the attention of Hedge funds but for all the wrong reasons. Evidently they are the prime target for 'shorters', that is investors that bet on a company share price going down. Nikon is not alone in this and other technology companies like Casio are also targets.
Why the negativity towards these companies?