Sales, Profits Slip for Kyocera’s First Quarter

On August 2nd, Kyocera Corporation of Tokyo, Japan, results for its first quarter (April 1 to June 30, 2019).

Sales revenue during the first quarter decreased 0.7 percent year-over-year to  384,937 million yen (U.S. $3,564 million). Higher sales of mobile phones in the Japanese market contributed to increased sales revenue in the Equipment & Systems Business. However, this was offset by decreased sales in the Components Business, stemming from sluggish growth in global smartphone and semiconductor-related markets, combined with uncertainty surrounding trade relations between the United States and China.

Despite profit growth in the Equipment & Systems Business, led by increased sales and profitability in the Communications Group, the company recorded lower profit as compared to the prior first quarter, due to the impact of lower revenue in the Components Business; higher depreciation charges; increased research and development expenses; and approximately 5,500 yen million (U.S. $51 million) in costs incurred through the company’s 60^th anniversary celebrations.

As a result, operating profit decreased 39.0 percent year-over-year to 22,629 million yen (U.S. $210 million); profit before income taxes decreased 18.0 percent year-over-year to 45,486 million yen (U.S. $421) million; and profit attributable to owners of the parent decreased 24.2 percent to 32,037 million yen (U.S. $297 million).

Averaged exchange rates during the first quarter showed the Japanese yen weakening against the U.S. dollar by approximately 0.9 percent year-over-year to 110 yen, and strengthening against the euro by approximately 5.4 percent year-over-year to 123 yen. Kyocera said this had the effect of decreasing sales revenue by approximately 4,500 million yen (U.S. $42 million) and profit before income taxes by approximately 2,000 million yen (U.S. $19 million).

Document Solutions Group

Sales revenue generated by the Document Solutions Group for the first quarter decreased year-over-year by 1,666 million yen, or 1.9 percent, to 87,130 million yen compared with 88,796 million yen for the first quarter  a year ago, due mainly to the effect of currency fluctuations.

Business profit for the group decreased year-over-year by 1,382 million yen, or 13.4 percent, to 8,966 million yen compared with 10,348 million yen for the first quarter a year ago, which Kyocera also attributed to the effect of currency fluctuation.

Despite this, the group generated a double-digit business profit ratio “on the back of efforts to enhance productivity and cost reductions.”

  Results of Operations: Three Months Ended June 30

Unit: Millions (except percentages and per-share amounts)
	Three Months Ended June 30,
	2018 (FY19-Q1) in JPY	2019 (FY20-Q1) in JPY	Change		2019 (FY20-Q1) in USD	2019 (FY20-Q1) in EUR
			Amount in JPY	%
Sales revenue:	387,484	384,937	(2,547)	(0.7)	3,564	3,155
Operating profit:	37,104	22,629	(14,475)	(39.0)	210	185
Profit before income taxes:	55,488	45,486	(10,002)	(18.0)	421	373
Profit attributable to owners of the parent:	42,284	32,037	(10,247)	(24.2)	297	263
Earnings per share attributable to owners of the parent (basic):	116.29	88.56	－	－	0.82	0.73
Note on exchange rates: U.S. dollar (USD) and euro (EUR) conversions are provided above as a convenience to the reader, based on the rates of USD1 = JPY108 and EUR1 = JPY122, rounded to the nearest unit (as of June 28, 2019)

Forecast for the Fiscal Year Ending March 31, 2020

Kyocera stated that its first-quarter financial results were “not far” from its original projections as a whole. It stated that although uncertainty exists about the future of international relations and trade regulations, it will continue to enhance productivity and reduce costs in the second quarter (the three months that will end on September 30, 2019) and beyond.

Specific objectives include profitability improvement in the organic materials, telecommunications equipment, and solar energy businesses, in which the company conducted structural reforms during the prior fiscal year. As a result, Kyocera has made no change to the sales revenue and profit forecasts for the year ending March 31, 2020 that it announced on April 25, 2019.

Unit: Yen in millions (except percentages, per-share amounts and exchange rates)
		Fiscal 2019 Results		Fiscal 2020 Forecast		Change (%) from Fiscal 2019 Results
Sales revenue:		1,623,710		1,700,000		4.7
Operating profit:		94,823		140,000		47.6
Profit before income taxes:		140,610		180,000		28.0
Profit attributable to owners of the parent:		103,210		125,000		21.1
Earnings per share attributable to owners of the parent (basic):		284.94		345.54	*	–
Average USD exchange rate:		111		105		–
Average EUR exchange rate:		128		120		–
Based on the average number of shares outstanding during the three months ended June 30, 2019.

More Resources

• July 2019: Kyocera Acquires ICT, IT Infrastructure Company
• April 2019: Kyocera Stresses Dealer Commitment, Solutions, at Dealer Show
• April 2019: Kyocera Posts Record Revenue High for Fiscal Year
• April 2019: Kyocera Introduces New Global Corporate Branding
• November 2018: Kyocera Reports Record Sales for First Half
• August 2018: Kyocera Reports Latest Financial Results
• July 2018: Kyocera Expands Production in Vietnam