Murata Manufacturing (6981) Q1 2026 earnings summary

Executive summary

• Q1 FY2025 revenue was ¥416.2B, down 1.3% year-over-year, with operating profit down 7.2% and profit attributable to owners down 25.1%.

• Profitability was impacted by falling product prices, a stronger yen, and weaker smartphone demand, despite cost reductions and higher operation rates.

• Strong demand for AI server and automotive components offset declines in high-frequency modules and smartphone-related products.

• Orders and backlog increased year-over-year and sequentially, with a book-to-bill ratio of 1.04.

• Battery business returned to profitability in Q1, with ongoing restructuring and focus on lithium-ion secondary batteries.

Financial highlights

• Operating profit margin for Q1 FY2025 was 14.8%, down from 15.7% year-over-year but up from 11.1% in the previous quarter.

• Profit attributable to owners was ¥49.7B, up 53.0% sequentially but down 25.1% year-over-year.

• Cash and cash equivalents at quarter-end were ¥519.6B, down ¥18.1B from the previous year.

• Free cash flow improved to ¥6.4B from negative ¥3.1B year-over-year.

• Capital expenditures for Q1 FY2025 were ¥34.7B, down 16.7% year-over-year.

Outlook and guidance

• Full-year FY2025 revenue and profit projections remain unchanged; demand expected to be front-loaded in the first half due to tariff policy impacts.

• FY2025 revenue projected at ¥1,640.0B (down 5.9% year-over-year), operating profit at ¥220.0B (down 21.3%), and profit attributable to owners at ¥177.0B (down 24.3%).

• Basic EPS for the year projected at ¥95.04.

• Risks of a reactionary decline in the second half are factored into guidance.