Strong Earnings for Fujifilm in 4Q13

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Fujifilm Holdings Corporation (FUJIY) reported a net income of ¥25.4 billion ($275.7 million) for fourth quarter of fiscal 2013 (ended Mar 31, 2013), up 26.7% year over year, in local currency.

Net income in fiscal 2013 amounted to ¥54.3 billion ($654.0 million), increasing by 24.0% over fiscal 2012.

Revenue: Revenue in the reported quarter increased 4.6% year over year to ¥603.5 billion ($6,546.5 million). It surpassed the Zacks Consensus Estimate of $6,039.0 million by a comfortable margin. However, revenue was negatively impacted by economic slowdown in Europe, which was offset by the launch of newer products.

Revenues from the Imaging Solutions segment accounted for 12.0% of total revenue at ¥72.5 billion ($786.0 million), Information Solutions segment contributed 42.1% of total revenue at ¥254.6 billion ($2,761.7 million) and Document Solutions generated 45.9% at ¥280.3 billion ($3,040.1 million).

Of the total revenue, domestic revenue accounted for 45.9% while international revenue generated 54.1% during the quarter.

Total revenue generation in fiscal 2013 was ¥2,214.7 billion ($26,689.5 million), increasing 0.9% year over year.

Costs/Margins: Gross margin in the fiscal fourth quarter stood at 37.7%, declining 200 basis points from the year-ago quarter. In the quarter, SG&A and R&D expenses together accounted for ¥178.6 billion ($1,936.9 million); representing 29.6% of total revenue.

Gross margin for fiscal 2013 was recorded at 38.4%, decreasing 110 basis points year over year. Operating margin for the fiscal year was 5.2% against 5.1% for fiscal 2012.    

Balance Sheet: Cash and cash equivalents at the end of the period registered an increase of 4.1% over the previous sequential quarter, standing at ¥445.4 billion ($4,730.2 million).

Long-term debt of the company stood at ¥317.6 billion ($3,372.9 million) as on Mar 31, 2013, up 28.9% from the end of Dec 31, 2012.

Cash flow: Net cash provided by operating activities for fiscal 2013, increased to ¥199.5 billion ($2,403.6 million) against ¥135.1 billion ($1,711.2 million) in fiscal 2012. Capital expenditure for fiscal 2013 accounted for ¥89.9 billion ($1,083.1 million), compared with ¥100.8 billion ($1,276.0 million) for fiscal 2012.

Outlook: Keeping in view the strong financials for fiscal 2013, Fujifilm expects its revenue generation in the year ending Mar 31, 2014 to be ¥2,350.0 billion, increasing 6.1% year over year. Operating income is expected to be ¥140.0 million, an increase of 22.7% over fiscal 2013. Also, Fujifilm expects its net income for the coming fiscal to be $70.0 billion, increasing 29.0% year over year.

Fujifilm currently carries a Zacks Rank #5 (Strong Sell). Other technology stocks worth a look are Applied Materials Inc. (AMAT) and Orbit International Corp. (ORBT), with a Zacks Rank #1 (Strong Buy) each; whereas Semiconductor Manufacturing International Corp. (SMI) carries a Zacks Rank #2 (Buy).

Note:

1. The effective currency exchange rates used for the US Dollar against Japanese Yen for Income Statement and Cash Flow Statement were ¥92.19 and ¥79.26 for quarter ended March 2013 and March 2012, respectively.

2. The effective currency exchange rates used for the US Dollar against Japanese Yen for Income Statement and Cash Flow Statement were ¥82.98 and ¥78.97 for year ended March 2013 and March 2012, respectively.

3. The effective currency exchange rate used for the US Dollar against Japanese Yen for Balance Sheet was ¥94.16 for the year ended March 2013.

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