Yaskawa Electric (6506 JP): FY17 Q3 Results Comment
Main Points
• FY17 Q3 OP ¥13.8bn (+77% YoY) in line with guidance, but 5-8% below consensus
• Order backlogs growing for robotics and servomotors, evidence that demand remains strong
• Even so, management emphasized the company will not beat its FY17 earnings guidance due to the constraints to speeding up delivery and higher losses in the small Systems Engineering Division
• Bright spot is Q3 Robotics OPM of 12.3% – a record high which management says is sustainable
• Going forward, we expect the key driver to both top-line and profit growth will be the Robotics division rather than Motion Control division
• Overall, the market will likely focus on the continued strength of the main products – servomotors and robotics – and expectations for better inverter profitability as the new Zero series comes fully on-line
• Indications are for strong automation demand in FY18, while product write-offs and restructuring in FY17 should reduce, if not eliminate, solar product losses in Systems Engineering
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