Latest Update : Feb.26, 2018

Back to Financial Results (FY3/2018)

Investor Conference Call for 3Q FY 3/2018 held on February 7, 2018

* Some parts have been added and modified for a clearer understanding.


Question and Answer

We expect electronic device sales for the fourth quarter to decline, due to seasonal adjustments, totaling out at 43.7 billion yen. Although I cannot give you that many details about next fiscal year due to customer confidentiality agreements, we expect demand to remain healthy as you can see from slide 18. On the question of LCDs vs. OLEDs, I really can't say anything about it.
The motor business will remain steady. Sensing devices are underperforming somewhat, but they will soon generate a profit as productivity improves. We also factored in some cost adjustments related to arrangement with customers.
Yes, we believe so.
I promise to give you the details at the investor meeting to be held in May. Overall we expect to remain on a growth path as we explained in the second quarter investor meeting held last November. Basically our outlook hasn't changed and we are moving steadily forward. As I explained earlier, external sales were excellent in January, and our production capacity is shaping up. We are also getting things ready so we can start operating the additional manufacturing equipment we acquired with our 8-billion-yen investment.
Basically productivity improved for all products across the board, which really gave their profitability a shot in the arm. Among all the products though, mechanical parts, including game console, drove third quarter profits up the most on a quarter-on-quarter basis. We also saw substantial profit increases for other products as well.
Third quarter results for optical devices fell slightly short of our projections since some of the sales will not be realized until the fourth quarter. However, optical devices yielded higher profits than the previous quarter, bringing Mitsumi business profits up on the whole.
It's the latter. We made our projections mainly in light of the latest results and seasonal factors such as the Chinese New Year holiday. In regard to smartphones related products, we also gave some consideration to changes in production.
We plan to boost production for the game-related business with the start of the next fiscal year. However, we will have fewer operating days in the fourth quarter due to the Chinese New Year holiday and other seasonal factors.
The external sales volumes for ball bearings were 188 million units in October, 198 million units in November, and 193 million units in December. The internal sales volumes for these months were 82 million units, 75 million units, and 73 million units respectively. The production volumes were 270 million units, 273 million units, and 276 million units. The pivot assembly sales volumes were 28 million units, 29 million units, and 25 million units while the monthly production volume remained at 25 million units from October to December.
Productivity for the optical device business including OISs has substantially improved since the business integration as I have always said it would. When it comes to customers' wallet share, we have no information about that. The shipment volume was low in the third quarter because production launch timing in the supply chain was off, as was inventory, and we missed the opportunity to capture demand. However production and shipments remained steady, as they were in the second quarter, and profits were up from the second quarter.
That's about the size of it for the third and fourth quarters.
As I explained earlier, we didn't ship as much as we had expected since halfway through the third quarter there were problems with production launch timing, inventory, and conditions in the supply chain.
Yes, it hasn't changed at all. There has been no change in our projections or the factors that are expected to have negative effects on our performance next fiscal year. We currently have the capacity to generate further profits above the 9-billion-yen target and will take a closer look at how things will go next fiscal year.
I cannot give you information about specific customers, but we expect that the overall LED backlight business will remain on a solid footing next fiscal year.
Sales increased quarter on quarter. I don't know what the inventory situation is like in the overall supply chain, but our inventory hasn't grown to the point where we won't be able to sell it all by the end of the fiscal year or that it will have a negative impact on us next year.
As I noted earlier, our overall inventory has declined from the end of last quarter. Optical devices don't make up that much of our inventory.
First of all we have to make our estimates conservative because of the characteristics of the markets where we operate. We took a comprehensive look at various aspects, such as the reduced operating days due to the Chinese New Year holiday as well as revised exchange rate projections, and factored them all in.
We expect fourth quarter sales to decline, but the drop will not be that big since part of our third quarter sales will be accounted for in the fourth quarter.
I'm afraid I can't give you any specific details due to customer confidentiality agreements. In running this business, we face a host of obstacles, such as finalizing specifications. It's only after we smooth out all the wrinkles that we can finally recognize them as either profits or losses each quarter.
Costs incurred in the third quarter and throughout the year will be adjusted in the fourth quarter.
I'm sorry but I'm just not at liberty to answer that question.

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