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FUJIFILM (FUJIY) Q1 Earnings Beat, Revenues Lag Estimates

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FUJIFILM (FUJIY - Free Report) reported first-quarter fiscal 2019 earnings of 60 cents per share that beat the Zacks Consensus Estimate by 15 cents but plunged 33.3% from the year-ago quarter.

Revenues of $5,180 million (¥564.9 million) lagged the Zacks Consensus Estimate of $5,339 million. The figure (in ¥) decreased 1.2% from the year-ago quarter on a constant currency (cc) basis primarily due to lower sales in the document business.

Domestic — 40.7% of revenues — was ¥229.9 million, down 0.7% from the year-ago quarter. Overseas — 59.3% of revenues — was ¥335 million, down 1.5% from the year-ago quarter.

Segment Details

Imaging Solutions segment — 15.6% of revenues — was ¥87.9 million, up 2.8% from the year-ago quarter at cc. Solid revenues from photo imaging, electronic imaging and optical device businesses drove top-line growth.  

Photo imaging business gained from strong sales of instant photo systems such as instax series (1.75 million units sold in the quarter) and films. Robust performance from instax SQUARE SQ6 instant camera also contributed. Moreover, value-added printing businesses like Wall Decor and Photobook expanded in the reported quarter.
 

Fujifilm Holdings Corp. Price, Consensus and EPS Surprise

Fujifilm Holdings Corp. Price, Consensus and EPS Surprise | Fujifilm Holdings Corp. Quote

 

Electronic imaging benefited from solid sales of FUJIFILM X-H1 and FUJIFILM X-T100. Optical device business gained from steady performance of various lenses apt for industrial usage like vehicle cameras. FUJIFILM is the pioneer of 4K lenses for use in broadcasting, and the company is striving to increase market share with product lineup of 8 models.  

Healthcare & Material Solutions segment — 41.8% of revenues — was ¥235.9 million, up 2.6% from the year-ago quarter at cc.

Healthcare revenues jumped 11.4% at cc to ¥101.8 million, driven by solid medical systems business that benefited from strength in In-vitro Diagnostic (IVD) systems, X-ray imaging diagnostic and endoscope.

Overall pharmaceutical business sales increased due to the anti-influenza drug, Avigan Tablet. Regenerative medicine business revenues increased due to strong contribution from Irvine Scientific Sales Company and IS JAPAN, which were acquired in June 2018.

Moreover, revenues from life sciences business increased due to strong sales of products like ASTALIFT WHITE and BB.

Further, revenues from electronic materials business increased primarily due to strong demand for photo resists and peripheral markets related to photolithography.

Document Solutions segment — 42.7% of revenues — was ¥241.1 million, down 5.8% from the year-ago quarter at cc. The decline was primarily attributed to reduction of low-profit, low-end printer business. However, revenues increased in the photo imaging, medical systems and electronic materials businesses.

Operating Details

Operating income increased 2.4% year over year at cc to ¥36.9 million, driven by profits from medical systems, electronic materials and document businesses.

Imaging Solutions segment operating income fell 8.8% at cc to ¥12.2 million reflecting higher research & development (R&D) expense related to next generation processor and sensor for digital cameras.

Healthcare & Material Solutions segment operating income declined 2.7% at cc to ¥18.1 million. This reflected higher raw-material price of aluminium and others.

Document Solutions segment operating income jumped 33.2% year over year to ¥14.9 million.

Balance Sheet & Cash Flow

As of Jun 30, 2018, cash and cash equivalents were ¥723.9 million, down from ¥768.2 million as of Mar 31, 2018.

In first quarter of fiscal 2019, cash flow from operating activities was ¥87 million.

FUJIFILM’s board also announced a share buyback program worth ¥100 billion.

Guidance

FUJIFILM estimates 3.1% year-over-year rise in revenues to ¥2.510 billion in fiscal 2019. Operating income is projected at ¥200 billion, reflecting 62.2% year-over-year growth.

Zacks Rank & Stocks to Consider

Currently, FUJIFILM has a Zacks Rank #3 (Hold).

Intel (INTC - Free Report) , Fortinet (FTNT - Free Report) and Paycom Software (PAYC - Free Report) are stocks worth considering in the broader computer and technology sector. While Intel has a Zacks Rank #2 (Buy), Fortinet and Paycom sport Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Intel, Fortinet and Paycom is currently pegged at 8.42% 16.75% and 24.82%, respectively.

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