Sumitomo Forestry announced that consolidated ordinary income for the fiscal year ending December 2026 is expected to fall 47% from the previous fiscal year to ¥92.5 billion. Weak demand and high interest rates in the U.S. housing business are expected to significantly pressure earnings even as revenue increases.
Sumitomo Forestry expects consolidated ordinary income for the fiscal year ending December 2026 to fall 47% from the previous fiscal year to ¥92.5 billion. The forecast has been reduced by ¥22.5 billion from the previous estimate, while revenue is expected to rise 23% to ¥2.78 trillion and operating income to fall 26% to ¥125 billion. Attention is focused on the factors behind the earnings shortfall against the backdrop of weakness in the U.S. housing market and on subsequent progress.
In results for the 9-month period of fiscal 2026 announced the same day, net income fell 44% year on year to ¥39.6 billion. In addition to weaker demand in the U.S. housing market, amortization of goodwill weighed on earnings. Revenue is expected to increase as a result of the contribution from Tri Pointe Homes, a major U.S. homebuilder acquired in May, but an improvement in overall profitability is expected to take time.
The company also indicated a policy of selling cross-held shares to offset the shortfall in operating performance. Future earnings forecasts may move up or down depending on the timing of a recovery in the U.S. housing market and trends in related costs.
Sumitomo Forestry identifies persistently high mortgage rates as a factor suppressing demand in the U.S. market. Whether weakness in the U.S. business continues is expected to affect future growth potential.