Nikon second quarter financial results: A bit better than we expected


posted Tuesday, November 10, 2015 at 8:44 AM EST


Today at a conference in Tokyo, Nikon Corporation shared their financial results for the second quarter of the fiscal year ending March 31, 2016. While the numbers for their camera business are still markedly down, their outlook seems better than for some of their competitors. 

The results show that Nikon's overall "sales and operating income increased 5% and 11% respectively, year on year", but all the growth was in their Precision Equipment Business (semiconductor exposure systems) and their Instruments Business (microscopes and other imaging systems). Their Imaging Products Business (basically cameras, lenses, accessories and software) saw sales fall 5% and operating income 12%, while figures for the entire first half of the fiscal year were -13.8% in net sales, but just -3.3% in operating income. (See the table below.) 

Financial results from the first half of the fiscal year for Nikon's imaging business

Nikon has revised its full-year overall sales downward by 15 billion yen ($121.8 million USD at the current exchange rate) but that's only a 2% decrease, and overall operating income forecasts remain unchanged. The good news is that projections for the Imaging Products Business are up 5 billion yen (almost 12%) from earlier estimates, on unchanged sales projections. 

Nikon's latest estimation for their imaging products business

Nikon is clearly continuing to struggle with changes in the camera market, but it's worth noting that at least some of this could be down to global economic factors in this last quarter; in their first fiscal quarter, both sales and profits in the Imaging area were actually up over the prior year.

It'll be interesting to see what the current quarter holds for Nikon as well as the other camera makers. As the technical differences from one generation of digital cameras to the next continue to become less significant (current cameras are really just insanely good, considering the distance we've come with them), we at IR expect to see some continued decline in the interchangeable-lens (ILC) market, but then a leveling off. Eventually, we think the long-term market for ILCs will be somewhat greater than it was during the heyday of the film era, but perhaps half of what it was at the time of peak digital sales. Current cameras have gotten so good at basic picture-taking that the replacement cycle has lengthened considerably. Despite the encroachment of cell phones, though, we see the market for ILCs continuing strong for some years yet. Meanwhile, it at least can be said that Nikon's camera-related financials haven't declined as much as those of some of their competitors.

Stay tuned; it's still a wild ride for camera manufacturers, but an utterly fantastic time to be a photographer!

For additional financial information from Nikon, see here

(Seen via Digital Camera Info