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Investing.com -- Japanese construction equipment maker Komatsu reported a 7% year-on-year decline in second-quarter operating profit to ¥136.7 billion, exceeding the ¥129 billion consensus estimate but falling short of the company’s April guidance figures.
The Q2 results were impacted by a greater-than-expected drop in sales volumes, particularly in Asia, which contributed to the earnings miss.
Despite the quarterly decline, Komatsu has raised its full-year operating profit guidance from ¥478 billion to ¥500 billion. This upward revision comes despite expectations of significantly lower sales in Asia, especially Indonesia.
The company’s revised guidance reflects several adjustments, including a positive foreign exchange impact of ¥71 billion, higher selling prices adding ¥9.3 billion, and cost variation contributing ¥12.6 billion. These positive factors are partially offset by volume mix differences of negative ¥78.5 billion.
Komatsu has updated its regional demand forecasts, raising expectations for North America and Europe while substantially lowering projections for Japan and Southeast Asia. The mining business forecast has also been revised downward due to falling coal prices in Indonesia.
The company anticipates a deterioration in its product mix as sales decline in highly profitable regions and among high-margin products.
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