reports
- Dan Baker
Fanuc’s Weak 2018 Guidance Likely to Be a Short-Term Blip in a Stron...
Wide-moat Fanuc posted strong fiscal 2017 (year ending March 2018) results featuring an 50% year-over-year increase in operating income. However, the strong result was overshadowed by very weak company guidance for fiscal 2018 of revenue declining 13% and operating profit declining 34%. This is well below our previous forecast for growth in both lines. Management blamed the expected slowdown on weakening demand in the IT and smartphone industries which we have seen impacting on other smartphone ...
- Shanshan Wei
- CFA
Its self-sufficiency for key components in the automation space benefi...
Wide-moat Fanuc posted strong third-quarter results featuring an 86% year-over-year increase in operating income, above Yaskawa’s 77% increase. The result again demonstrated the firm’s outstanding brand equity, entrenched customer relationship, and cost advantage as the world’s largest computer numerical control, or CNC, and robot vendor. We are increasing our fair value estimate to JPY 34,100 from JPY 26,700 to reflect stronger demand for numerical control, or NC, machines and robomachine...
- Shanshan Wei
- CFA
Increasing Fanuc’s FVE to JPY 34,100 Following an Outstanding 3Q; St...
Wide-moat Fanuc posted strong third-quarter results featuring an 86% year-over-year increase in operating income, above Yaskawa’s 77% increase. The result again demonstrated the firm’s outstanding brand equity, entrenched customer relationship, and cost advantage as the world’s largest computer numerical control, or CNC, and robot vendor. We are increasing our fair value estimate to JPY 34,100 from JPY 26,700 to reflect stronger demand for numerical control, or NC, machines and robomachine...
- Shanshan Wei
- CFA
Its self-sufficiency for key components in the automation space benefi...
Wide-moat Fanuc finally delivered strong numbers in the second quarter with its new capacity ramping up. Revenue and operating income beat our forecast and consensus by 9% and 4% year over year, respectively, driven by a jump in Robomachine sales. The strong capital expenditure demand for major model upgrades from September including iPhone and local brands has boosted the segmental sales in the first two quarters, though we still believe the growth rate will slowdown in the second half as evide...
- Shanshan Wei
- CFA
Fanuc Reports Healthy Fourth-Quarter Result, FVE Increasing Slightly t...
Wide-moat Fanuc’s full-year earnings beat our estimate as fourth-quarter FA and robot segment sales gained 30% and 19%, respectively. This more than offset a 27% drop in Robomachine segment sales from the high base last year as smartphone-related demand flattened. While we are encouraged by the 22% year-over-year growth in fourth-quarter orders and also by the company’s expectation that the recent strong growth will carry over to first-half fiscal 2017 (financial year ending March 2018), Fan...
- Shanshan Wei
- CFA
Transferring Coverage of Fanuc With JPY 18,300 FVE and Wide Moat Ratin...
We transfer coverage of Fanuc with a fair value estimate of JPY 18,300, which implies a forward P/E of 30 times, an enterprise value/EBITDA multiple of 15 times, and free cash flow yield of 2.5% to estimated fiscal 2017 earnings and cash flow. We assume the top line will decline by 1% in Japan but grow 5% elsewhere in local-currency terms between 2016 and 2020. We expect the operating margin will decline to around 31% in 2020 from 35% in 2015, owing to faster growth in the robot segment, which h...
- Phillip Zhong
Fanuc’s First-Half Results Beat Expectation on Improved Margin; Rais...
Wide-moat Fanuc’s first-half 2017 (fiscal year-end March 2017) net income of JPY 60.2 billion, down 34.5% year over year, was above our expectations thanks to a better-than-anticipated margin. We raise our fiscal 2017-19 earnings forecasts by 2%-8% to reflect the better margin achieved. As a result, we increase our fair value estimate to JPY 15,500 from JPY 14,600. Our fair value estimate implies about 30 times earnings per share for fiscal 2017 and 2.2 times book value. We think the company i...
- Phillip Zhong
Despite in-line results, Fanuc's FVE cut to JPY 14,600 to reflect chal...
As a worldwide leader in robotics; computerised numerical controls, or CNC; and servo motors, Fanuc has been able to generate superior margins. From 2006 through 2015, Fanuc achieved an average operating margin of 37.5%. Even during the global financial crisis, Fanuc’s operating margin still exceeded 20%. We attribute this to Fanuc’s technological leadership in its core fields, its strong cost control, and its economic moat arising from cost advantage and high switching costs.Fanuc has focus...
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