Presentation Transcripts

In the machined components business segment, third quarter sales of miniature and small sized ball bearings increased by 1.9% over the same period last year, but decreased by 3.5% from the previous quarter. Overall shipments including internal shipments of ball bearings to other company divisions increased 2 million units per month from the second quarter to a record-high average of 192 million units per month. This was due to strong demand for products such as pivot assemblies and fan motors. However, net sales declined from the previous quarter due mainly to impacts from a higher Japanese yen and a weaker US dollar. Profit increased from the previous quarter due to cost reductions. For the next quarter, we expect the shipment level will still be high.

Third quarter sales of rod-end and spherical bearings increased by 9.5% compared to the same period last year, but declined by 5.5% from the previous quarter due to the Christmas holidays and impacts from the higher Japanese yen and the weaker US dollar, even though bearings for aircraft parts remained in strong demand because of increasing global aircraft production. Profit decreased from the previous quarter due to a sales decline. For the next quarter and beyond, we will increase our production level to meet the growing demand in a timely manner.

Third quarter sales of pivot assemblies for hard disk drives increased by 17.7% over the same period last year, but decreased by 0.2% from the previous quarter. During the quarter, the sales volume of pivot assemblies reached 28 million units per month, a 1 million unit increase over the second quarter. However, sales decreased slightly due mainly to impacts from the higher Japanese yen and the weaker US dollar. Profit increased from the previous quarter due to improved production efficiency. For the next quarter, we expect a slight seasonal decrease in shipments, but estimate that the level will still be high.

Overall third quarter results for the machined components business segment included net sales of 36.1 billion yen, operating income of 7.1 billion yen and an operating margin of 19.8%.