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Investing.com -- THK reported second-quarter operating profit fell 29% year-on-year to ¥4.5 billion, missing the company’s guidance of ¥5.3 billion and analyst consensus of ¥5.1 billion.
The profit decline was primarily attributed to tariffs, which had a negative impact of ¥500 million during the quarter. However, THK stated that price pass-throughs are set to begin in earnest from the second quarter, which should virtually eliminate any cost increases from tariffs going forward.
Despite the earnings miss, industrial machinery orders showed strong performance, increasing 12% year-on-year and 11% quarter-on-quarter. This growth exceeded expectations and was driven by recovery in electronics and general machinery-related orders in Japan, strong overall demand in China, and continued high order levels in the Americas.
The company maintained its full-year guidance, expressing confidence that the current trend in orders should make its annual targets achievable.
THK’s share price had made slight gains over the past month prior to these results. With the better-than-feared order numbers, particularly from China and Japan, the stock could hold steady following this mixed earnings report.
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