Olympus profit - the cat is out of the bag (a little early)

Started Oct 29, 2013 | Discussions thread
Abrak
Senior MemberPosts: 1,535
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Re: can we kill this nonsense?
In reply to Zensu11, Nov 8, 2013

I am afraid rather typical of Olympus they managed to miss their rumored profit result last week of 30bn yen operating income. Furthermore they actually reported a net income loss in the first half compared to profit in the first half of last year due to an US$180m litigation charge. Still the medical division is doing pretty well obviously it will have been helped by the fall in the yen.

No big surprises in imaging. Olympus missed all its forecasts across the board as usual.

Key points...

1) Imaging sales were down from 56bn yen to 47bn (forecast 53bn). An 11% short fall on forecast is pretty good by Oly standards but remember the fall in the yen will have boosted sales by at least 10%.

2) Compact sales down from 33bn to 21bn (forecast 25bn yen). Mirrorless sales down from 18.8bn yen to 18.2bn yen (forecast 21.5bn) Note that Oly's compact sales still outsell ILCs - very different from say Canikon.

3) Gross margin fell slightly from 22.5bn yen to 22.1bn yen (forecast 22bn yen). I am always impressed by Olympus gross margin - at 47% of sales it is higher than both Canon and Nikon. When you consider that Oly has a higher percentage of lower margin compacts, its mirrorless gross margin must be at least 65%. Hardly surprising some people find their products pricey.

4) I am always equally impressed with Oly's SGA expenses. These fell from 27bn yen to 24.8bn yen and were over 10% higher than forecast. SG&A expenses are a whapping 53% of sales. I really cant think of another product manufacturer who achieves this ratio and this is a company that everyone seems to think should spend more on marketing!

5) That leaves it with a 2.7bn yen loss (forecast breakeven) which is an improvement on the 4.4bn yen loss of last year. Admittedly last year they managed to rack up a quite staggering 24bn yen loss for the business.

Anyway that leads us to Oly's latest round of fantasy forecasts for the year. Profit (sic) forecasts for the imaging division are cut from breakeven to a loss of 5bn yen (US$50m). Forecasts are ludicrously heroic. After mirrorless sales falling in the first half (despite a weaker yen), they are forecasting mirrorless sales to increase 78% on the second half of year (he ho, he ho) and for unit sales to rise 41%. (I have this theory that YDDY works in their forecasting department.)

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