Fujifilm Misses on Earnings by a Cent

Zacks

Fujifilm Holdings Corporation (FUJIY) reported net income of ¥18.5 billion ($180.0 million) for the fourth quarter of fiscal 2014 (ended Mar 31, 2014), down 27.2% year over year. Earnings per American Depositary Receipt (ADR) were recorded at roughly 37 cents, a cent lower than the Zacks Consensus Estimate of 38 cents.

Net income in fiscal 2014amounted to ¥81.0 billion ($808.3 million), increasing 49.3% over fiscal 2013. In fiscal 2014, earnings per ADR were recorded at $1.67, higher than the Zacks Consensus Estimate of $1.50.

Revenues: Revenues in the reported quarter improved 10.3% year over year to ¥665.6 billion ($6,473.1 million). The year-over-year rise in revenues was attributable to strong sales in the medical systems business, the graphic systems business, documents business and favorable effects of the yen depreciation. Revenues beat the Zacks Consensus Estimate of $5,898.0 million comprehensively.

Revenues from the Imaging Solutions segment came in at ¥95.6 billion ($929.7 million) and accounted for 14.4% of total revenue. The Information Solutions segment contributed ¥262.7 billion ($2,554.5 million) or 39.4% of total revenue and the Document Solutions segment generated ¥307.3 billion ($2,988.9 million) or 46.2% of total revenue.

Of the total revenue, domestic revenues accounted for 45.8%, while international revenues contributed the remaining 54.2%.

Total fiscal 2014revenue was ¥2,440.0 billion ($24,350.8 million), increasing 10.2% year over year. Yearly revenues beat the Zacks Consensus Estimate of $22,839.0 million.

Costs/Margins: Gross margin in fiscal fourth-quarter 2014 stood at 35.9%, down 180 basis points from the year-ago quarter. Selling, general and administrative (SG&A) and R&D expenses, together accounted for ¥197.6 billion ($1,921.6 million), representing 29.7% of the total revenue.

Balance Sheet: Exiting fiscal 2014, cash and cash equivalents stood at ¥604.6 billion ($5,881.0 million) registering an increase of 8.8% from the previous quarter.

The company’s long-term debt stood at ¥315.0 billion ($3,063.9 million) as of Mar 31, 2014, down 0.3% sequentially.

Cash flow: Net cash from operating activities for fiscal 2014 increased to ¥292.5 billion ($2,919.5 million) versus ¥199.4 5 billion ($2,403.6 million) in fiscal 2013. Capital expenditure for the reported year was ¥70.3 billion ($701.4 million), compared with ¥89.9 billion ($1,083.1 million) in fiscal 2013.

Outlook: Based on the mixed results for fiscal 2014, Fujifilm initiated its revenue guidance for fiscal 2015 at ¥2,460 billion, reflecting a year-over-year hike of 0.8%. Operating income is expected to be ¥160.0 billion, an increase of 13.6% from fiscal 2014. Moreover, Fujifilm estimates its net income for the coming fiscal to be ¥85.0 billion, increasing 4.9% year over year. This will lead to earnings of ¥176.36 per share.

Fujifilm currently carries a Zacks Rank #3 (Hold). Some better-ranked technology stocks worth a look include Amkor Technology, Inc. (AMKR), Intevac Inc. (IVAC) and Ultratech, Inc. (UTEK). While Amkor Technology sports a Zacks Rank #1 (Strong Buy), Intervac and Ultratech carries a Zacks Rank #2 (Buy).

Note:

1. The effective currency exchange rates used for the US Dollar against Japanese Yen for Income Statement and Cash Flow Statement were ¥102.82 and ¥92.19 for quarter ended March 2014 and March 2013, respectively.

2. The effective currency exchange rates used for the US Dollar against Japanese Yen for Income Statement and Cash Flow Statement were ¥100.20 and ¥82.98 for year ended March 2014 and March 2013, respectively.

3. The effective currency exchange rate used for the US Dollar against Japanese Yen for Balance Sheet was ¥102.80 for the year ended March 2014.

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