First-half progress is broadly on track against the full-year forecast, but the focus is on the sustainability of second-half earnings

As of the first quarter, the full-year forecast was revenue of ¥276,000 million and operating profit of ¥31,000 million, but at the second-quarter results announcement it was raised to revenue of ¥310,000 million and operating profit of ¥48,000 million. On a simple comparison, the revenue forecast was increased by ¥34,000 million, or approximately 12.3%, and the operating profit forecast by ¥17,000 million, or approximately 54.8%. The company cited capital investment in semiconductor-related equipment driven by AI demand, demand recovery and the effects of structural reforms as the background to the upward revision.

First-half revenue was ¥151,067 million and operating profit was ¥22,483 million. Progress against the new full-year forecast was 48.7% for revenue and 46.8% for operating profit, meaning that neither metric was materially behind schedule after half of the 12-month period. The first-half operating margin also improved to 14.9%, up 9.6 percentage points from the same period of the previous year, according to the disclosure.

On a simple calculation based on the difference between the full-year forecast and first-half results, the second half will require revenue of ¥158,933 million and operating profit of ¥25,517 million. This implies a second-half operating margin of approximately 16.1%, above the first-half margin of 14.9%. Accordingly, a key test in FY2026-Q3 will be whether the company can secure an even higher margin in the second half, rather than merely maintain the first half's strong performance.

The company has described strong orders, particularly in semiconductors, but has not disclosed order intake or order backlog. Accordingly, in FY2026-Q3 it will be important to see whether the company can explain separately not only revenue growth but also new order inflows, delivery schedules, production capacity, restructuring costs and the impact of US tariffs. In particular, if nine-month cumulative operating profit falls short of around ¥36,000 million, reliance on the fourth quarter to achieve full-year operating profit of ¥48,000 million will increase.