NOK (7240) Q2 2026 earnings summary

Executive summary

• Seal segment delivered steady growth, offsetting underperformance in Electronic Products, with 1H FY2025 results exceeding initial forecasts but full-year operating income guidance revised downward.

• Net income forecast for the full year remains unchanged, with gains from investment securities sales expected to offset negative factors and extraordinary losses.

• Integration agreement executed with Eagle Industry to form a joint holding company, aiming for enhanced group synergies, with both companies to be delisted and become subsidiaries by October 2026.

• Roller Product business divested to optimize the business portfolio, with a one-time extraordinary loss recognized.

• Decline in operating income was due to lower net sales, while ordinary income increased from reduced foreign exchange losses; higher income taxes led to a decrease in profit attributable to owners.

Financial highlights

• 1H FY2025 net sales: ¥359.4B, down 8.7% year-over-year; operating income: ¥15.7B, down 17.7%; net income: ¥13.3B, down 2.0%.

• Operating margin decreased to 4.4% from 4.8% year-over-year.

• Ordinary income rose 2.3% to ¥21.6B.

• EPS for 1H FY2025 was ¥81.66, down from ¥82.61.

• Comprehensive income surged to ¥31.2B from a loss of ¥2.4B in the prior year, driven by gains in available-for-sale securities and foreign currency translation.

Outlook and guidance

• Full-year FY2025 net sales forecast revised up to ¥766.9B; operating income revised down to ¥37.3B.

• Net income forecast maintained at ¥36.5B, with gains from share sales expected to offset lower operating income and extraordinary losses.

• Extraordinary loss of about ¥10B from sale of affiliated company shares and gain of about ¥25B from sale of investment securities factored into forecasts.

• Annual dividend forecast increased by ¥20 to ¥130/share.

• Seal segment forecast revised upward; Electronic Products segment forecast revised downward due to weaker smartphone and automobile demand.