Earnings Miss: Furukawa Electric Co., Ltd. Missed EPS By 7.5% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that Furukawa Electric Co., Ltd. (TSE:5801) filed its half-year result this time last week. The early response was not positive, with shares down 7.2% to JP¥9,668 in the past week. It looks like the results were a bit of a negative overall. While revenues of JP¥611b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 7.5% to hit JP¥111 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the nine analysts covering Furukawa Electric provided consensus estimates of JP¥1.21t revenue in 2026, which would reflect a small 2.7% decline over the past 12 months. Statutory earnings per share are predicted to increase 6.7% to JP¥532. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥1.21t and earnings per share (EPS) of JP¥554 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

View our latest analysis for Furukawa Electric

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥10,407, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Furukawa Electric analyst has a price target of JP¥13,000 per share, while the most pessimistic values it at JP¥8,250. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Furukawa Electric shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 5.3% by the end of 2026. This indicates a significant reduction from annual growth of 8.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.3% annually for the foreseeable future. It's pretty clear that Furukawa Electric's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Furukawa Electric. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at JP¥10,407, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Furukawa Electric going out to 2028, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Furukawa Electric you should be aware of, and 1 of them can't be ignored.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.