Revenue rose in the first half, but operating profit fell, with deteriorating margins in the Control segment weighing on consolidated results

Consolidated revenue for the six months from April through September 2026 was ¥298.229 billion, up ¥16.233 billion, or 5.8%, from ¥281.996 billion in the same period a year earlier. Operating profit, however, was ¥35.739 billion, down ¥3.249 billion, or 8.4%, from ¥38.988 billion. The operating margin also fell to 12.0% from approximately 13.8% in the same period a year earlier, indicating that higher revenue did not translate directly into profit growth.

By segment, the Control segment generated revenue of ¥275.9 billion and operating profit of ¥29.8 billion. Revenue rose 4.3% year on year, but operating profit fell 17.2%. The Measurement segment performed strongly, with revenue of ¥21.3 billion, up 40.1%, and operating profit of ¥6.2 billion, up 113.8%. New Businesses and Other generated revenue of ¥1.0 billion and an operating loss of ¥0.3 billion, leaving a structure that continued to weigh on consolidated profit.

The decline in first-half profit should therefore be viewed less as a broad-based slowdown in demand than as a profitability issue in the core Control segment. The earnings presentation cited deterioration in gross margin, higher SG&A expenses and increased personnel costs, but it is not yet clear whether growth in Control segment orders and revenue is accompanied by a recovery in margins. Demand related to AI data centers is making a significant contribution to growth in the Measurement segment, but its current profit contribution remains too small to fully offset the decline in Control segment profit.

At the next results announcement, it will be important to review not only the Control segment’s revenue growth but also its operating margin and year-on-year change in operating profit separately. In particular, the key questions are which of the effects of price declines, project profitability, materials and subcontracting costs, personnel expenses and upfront investment narrowed or became structural after the second quarter. Without a recovery in the first-half operating margin from 12.0% to the 13% range, it would be difficult to view an upward revision to the full-year operating profit forecast as evidence of underlying profit improvement.