Premium photographic image-product company Fujifilm Holdings Corporation FUJIY reported strong first-quarter fiscal 2016 (ended Jun 30, 2015) results. Net income during the quarter was ¥24.3 billion ($200.4 million), up 58.2% year over year. Quarterly earnings per American Depositary Receipt (“ADR”) were recorded at 41 cents, up 32.3% year over year.
Revenues
Revenues climbed 5.8% year over year to ¥590.9 billion ($4871.9 million), backed by gradual recovery in the global economy. Sales in the company’s businesses like photo imaging, graphic systems, medical systems and documents experienced remarkable growth in the quarter.
Revenues from the Imaging Solutions segment came in at ¥85.6 billion ($705.9 million), accounting for 14.5% of total revenue. The Information Solutions segment contributed ¥218.4 billion ($1800.6 million) or 37% of total revenue; while the Document Solutions segment generated ¥289.8 billion ($2389.5 million) or 49% of total revenue.
Of the total revenue, domestic revenues accounted for 38.4%; while international revenues contributed the remaining 61.6%.
Costs/Margins
Gross margin in fiscal first-quarter 2016 was 39.2%, up 10 basis points (bps) year over year. Selling, general and administrative (SG&A) and R&D expenses stood at ¥195.6 billion ($1612.9 million), representing 33.1% of total revenue.
Balance Sheet
Exiting first-quarter fiscal 2016, Fujifilm had cash and cash equivalents of ¥703 billion ($5728.6 million), down 3.3% from the value recorded on Mar 31, 2015. The company’s long-term debt was ¥313.0 billion ($2550.3 million), edging down 0.2% from fiscal 2015.
Cash flow
For first-quarter fiscal 2016, Fujifilm’s net cash from operating activities totaled ¥68.3 billion ($563.3 million), while its capital expenditure was ¥13.8 billion ($113.7 million).
Outlook
Fujifilm intends to improve its business in the long run, backed by strategic innovations and plans to enhance market share. The company expects to earn revenues worth ¥2580 billion in fiscal 2016, reflecting a year-over-year hike of 3.5%. Operating income is projected at ¥190 billion, depicting an increase of 10.2% from fiscal 2015 level. Moreover, the company estimates net income for the coming fiscal to be ¥120 billion, up 1.2% year over year. This will lead to earnings of ¥248.85 per share.
Stocks to Consider
Fujifilm currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Sphere 3D Corp. ANY, Mellanox Technologies, Ltd. MLNX and Cirrus Logic Inc. CRUS. While Mellanox Technologies, Ltd. sports a Zacks Rank #1 (Strong Buy), both Sphere 3D Corp. and Cirrus Logic Inc. hold a Zacks Rank #2 (Buy).
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