Can the strong Q1 progress translate into achievement of the full-year forecast?

FY2027-Q1 revenue was ¥4,317 million, up 20.8% year on year, operating profit was ¥561 million, up 47.5%, ordinary profit was ¥532 million, up 50.8%, and quarterly profit attributable to owners of the parent was ¥361 million, up 79.0%. Revenue progress in Q1 was 25.8% against the latest full-year forecast of ¥16,719 million, while operating profit progress was 39.1% against the full-year forecast of ¥1,436 million, meaning profit progress is substantially ahead of revenue progress.

FY2026 full-year results were revenue of ¥14,312 million and operating profit of ¥1,122 million. The FY2027 forecasts presented in the FY2026 full-year earnings report were revenue of ¥16,073 million and operating profit of ¥1,200 million, whereas the latest FY2027-Q1 forecasts have been raised to ¥16,719 million and ¥1,436 million, respectively. The operating profit forecast is 28.0% above FY2026 actual results, while the revenue forecast is 16.8% higher, with the company assuming continued demand growth and productivity improvements.

However, it is too early to judge full-year achievement solely from the high Q1 progress rates. Reaching 50% of the full-year revenue forecast requires standalone Q2 revenue of ¥4,043 million, while operating profit would reach the mechanical 50% level with an additional ¥157 million. Higher profitability in Q1 provides some cushion if it continues, but the allocation of first-half profit could vary depending on production plans for the aerospace and defense businesses, delivery timing for gas turbine components, and the timing of mold orders.

At the next results announcement, the focus should be not only on the absolute H1 results but also on progress against the full-year forecasts, the standalone Q2 change, and the profit mix by segment. The company’s explanation of the drivers of Q1 profit growth has been primarily qualitative, citing demand growth, price revisions and economies of scale, while the profit contribution of each factor has not been disclosed. In H1, it will therefore be necessary to confirm not only whether the full-year forecasts are maintained or revised again, but also whether price, volume or product mix supported profit progress.