Fujifilm (FUJIY) Beats on Q3 Earnings, Raises FY18 EPS View

Fujifilm Holdings Corporation FUJIY reported mixed third-quarter fiscal 2018 (ended Dec 31, 2017) results.

Inside the Headlines

Net income for the quarter came in at ¥53.6 billion ($474.9 million), up 20.9% year over year.

Quarterly earnings per American Depositary Receipt (“ADR”) came in at $1.08 per share, up 21.3% year over year. The bottom line also comfortably surpassed the Zacks Consensus Estimate of 67 cents per ADR. The upside was backed by sturdy sales secured from certain major businesses (like medical systems and electronic materials) and ongong medium-term management program.

Revenues

In the reported quarter, revenues improved 7.4% year over year to ¥621.7 billion ($5,507 million). However, the top line missed the Zacks Consensus Estimate of $5,600 million.

Revenues from the Imaging Solutions segment — 19.8% of the total revenues — came in at roughly ¥122.8 billion ($1,088.5 million). The Information Solutions segment revenues came in at ¥247.5 billion ($2,192.1 million), representing 39.8% of the total revenues, while the Document Solutions segment generated ¥251.4 billion ($2,262.5 million), accounting for 40.4% of the total revenues.

Of the total revenues, domestic revenues accounted for 39.2%, while international revenues made up the remaining 60.8%.

Costs/Margins

Gross margin in the fiscal third quarter expanded 20 basis points (bps) to 41%. Selling, general and administrative (SG&A), and R&D expenses were ¥202.5 billion ($1,793.4 million) or 32.5% of the total revenues.

Balance Sheet

Fujifilm exited the fiscal third quarter with cash and cash equivalents of roughly ¥652.2 billion ($5,787 million), down 25.5% from the figure recorded as of Mar 31, 2017. The company’s long-term debt came in at ¥437.7 billion ($3,884.1 million), marginally up 0.7% from the figure recorded at the end of fiscal 2017.

Cash Flow

In the first nine months of fiscal 2018, Fujifilm’s net cash from operating activities totaled ¥155.7 billion ($1,395 million), while its capital expenditure summed ¥48.4 billion ($434 million).

Outlook

The company estimates a 5.9% year-over-year rise in revenues to ¥2,460 billion in fiscal 2018. Operating income is projected at ¥130 billion, reflecting 24.5% downfall from fiscal 2017. However, net income for fiscal 2018 is estimated to be up 6.5% year over year to ¥140 billion. This will result in earnings per share of ¥322.16, higher than the prior view of ¥285.55.

Stocks to Consider

Some better-ranked stocks in the Zacks Categorized Computer and Technology Sector are listed below:

AMTEK, Inc. AME carries a Zacks Rank of 2 (Buy). The company has pulled of an average positive earnings surprise of 4.14% in the last four quarters. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Applied Materials, Inc. AMAT has a Zacks Rank of 2. The company generated an average positive earnings surprise of 2.82% during the same time frame.

Canon, Inc. CAJ also holds a Zacks Rank of 2. The company pulled of an average positive earnings surprise of 17.90% over the preceding four quarters.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.

Zacks Investment Research