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Nikon (NINOY) Q1 Earnings Beat Estimates, Revenues Down Y/Y

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Nikon (NINOY - Free Report) reported first-quarter fiscal 2019 earnings of 38 cents per share that beat the Zacks Consensus Estimate of 22 cents and is much higher than year-ago quarter figure of 20 cents.

Revenues of ¥166 billion ($1.53 billion) decreased almost 2% year over year.

Segment Details

Imaging Products business’ revenues declined 13% year over year to ¥79.1 billion. The top line suffered from decline across all product lines. Management stated that DSLR market continues to shrink due to expansion of ML cameras. However, demand for D850 is still high after a year of release. Moreover, product mix improved.

Precision Equipment business’ revenues increased 7% from the year-ago quarter to ¥59 billion. FPD Lithography business benefited from increased sales of large-sized panels including G10.5.

Healthcare business revenues surged 21% from the year-ago quarter to ¥13.3 billion. Nikon stated that sales of biological microscopes expanded in major markets including the United States, Europe and China. Retinal imaging diagnosis instruments showed steady performance primarily in the U.S. optometrist market.
 

 

Industrial Metrology and Others business’ revenues increased 18% year over year to ¥15.4 billion. Revenues from inspection instruments such as image measuring system and X-ray inspection system grew on a year-over-year basis.

Operating Details

Operating profit jumped 53.2% year over year to ¥19 billion. Operating margin expanded 410 basis points (bps) to 11.4% in the reported quarter.

Imaging Products business’ operating profit jumped 63.2% year over year to ¥12.4 billion, primarily driven by reduced expenses.

Precision Equipment business’ operating profit increased 7.6% from the year-ago quarter to ¥14.1 billion.

Healthcare business’ operating loss was ¥2.1 billion. Industrial Metrology and Others business’ operating profit was ¥1.1 billion.

Guidance

For fiscal 2019, revenues are projected to increase 23% to ¥740 billion. Operating income is estimated to increase 17.8% from the year-ago quarter to ¥74 billion, up ¥4 billion from previous guidance.

Free cash flow is projected to be ¥60 billion.

Segment wise, Imaging Products’ fiscal 2019 revenues are expected to decline 11.3% year over year to ¥320 billion, while operating profit is now expected to be ¥33 billion, up ¥4 billion from previous guidance.

Precision Equipment business’ fiscal 2019 revenues are expected to jump 24.6% to ¥282 billion, while operating profit is expected to be ¥68 billion.

Healthcare business’ fiscal 2019 revenues are anticipated to increase 10.9% to ¥63 billion. Operating loss is projected to be ¥4 billion.
 
Industrial Metrology and Others business’ fiscal 2019 revenues are expected to increase 2.5% to ¥75 billion. Operating profit is expected to be ¥6 billion.

Zacks Rank & Other Stocks to Consider

Currently, Nikon sports a Zacks Rank #1 (Strong Buy).

Intel (INTC - Free Report) , Fortinet (FTNT - Free Report) and Paycom Software (PAYC - Free Report) are stocks worth considering in the broader computer and technology sector as all of them sport the same Zacks Rank as of Nikon. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Intel, Fortinet and Paycom is currently pegged at 8.42% 16.75% and 24.82%, respectively.

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