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Investing.com -- Japan Steel Works (TYO:5631) reported robust first-quarter earnings for fiscal year 2026 on Monday, with operating profit growing 23.5% year-over-year to ¥5.3 billion, significantly outpacing the company’s full-year guidance of 7.3% growth.
The quarterly operating profit reached 21.5% of the company’s full-year target of ¥24.5 billion. The Industrial Machinery segment drove much of this growth, with revenues increasing to ¥57.7 billion from ¥38.1 billion a year earlier. The segment’s operating profit rose to ¥4.3 billion from ¥3.3 billion, though operating profit margin decreased to 7.5% from 8.6% in the same period last year.
Meanwhile, the Materials & Engineering division reported flat sales of ¥9.2 billion year-over-year, with operating profit declining due to higher overhead costs and product mix changes. However, the division’s 18.2% operating profit margin remained in line with company guidance of 18.0%.
Order momentum showed mixed results across segments. The Materials & Engineering division secured ¥9.8 billion in new orders, up from ¥8.1 billion a year ago, with approximately 60% coming from gas-fired power plant clients requesting turbines and shafts. Demand remained strong across North America, South Asia, and Japan.
Industrial Machinery orders appeared lighter than expected, particularly in plastic processing, which recorded only ¥7.6 billion in orders against a full-year target of ¥59.0 billion. Management noted no orders for pelletizers in the quarter, attributing this to delayed final investment decisions in China amid trade war concerns. Demand for lithium-ion separator film sheet machinery for electric vehicles remained extremely weak.
After-service orders performed well, representing over 70% of total orders and improving both year-over-year and quarter-over-quarter. Molding machine orders were surprisingly strong at ¥16.3 billion against a ¥70.0 billion full-year target, despite anticipated slowdowns from trade wars affecting the Japanese automotive industry. Military and defense product orders reached ¥22.5 billion, in line with expectations considering seasonal factors.
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