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Fujifilm's (FUJIY) Revenues Decline Y/Y: Should You Sell?

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We issued an updated research report on premium multinational firm, FUJIFILM Holdings Corporation (FUJIY - Free Report) , on Feb 13, 2017.

Fujifilm’s stock presently seems to be less promising at the moment. Over the last one month, shares of this Zacks Rank #5 (Strong Sell) stock recorded a loss of 0.98%, as against the gain of 2.19% recorded by the Zacks classified Photo Equipment & Supplies industry.

Existing Scenario

In third-quarter fiscal 2017 (Dec 30, 2016), Fujifilm’s revenues dipped 5.4% year over year. Reduced optical device field sales, poor pharmaceutical business and weak document solutions’ trade in Japan weighed over the company’s aggregate top-line results. If these bearish market aspects persist in the near term, then Fujifilm is likely to report lower revenues in the quarters ahead. Notably, the company anticipates a 3.7% year-over-year decline in revenues in fiscal 2017.

Moreover, the company’s international operations remain exposed to significant market uncertainties. Any unfavorable changes in the political, environmental, social and economic aspects of international markets might adversely affect the company’s top and bottom lines in the coming quarters.

Notably, each business segment of Fujifilm faces stiff competition. Extensive business rivalry increases the bargaining power of customers and thus, exposes the company to risks of market share loss. Additionally, the Japanse Yen is currently appreciating, thereby enhancing the competitive power of smaller companies operating in low-cost nations. Factors like these have been increasing revenue and margin loss risks for Fujifilm.

Over the last 60 days, the Zacks Consensus Estimate for the stock has been revised downwards for both fiscal 2017 and 2018.

Stocks to Consider

Some better-ranked stocks within the industry are listed below:

Applied Optoelectronics, Inc. (AAOI - Free Report) has an impressive average earnings surprise of 106.74% for the trailing four quarters and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ballard Power Systems Inc. (BLDP - Free Report) presently carries a Zacks Rank #2 (Buy) and has an average positive earnings surprise of 12.50% for the last four quarters.

OSI Systems, Inc. (OSIS - Free Report) also holds a Zacks Rank #2 and has an average positive earnings surprise of 12.92% for the past four quarters.

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