Earnings Miss: Sumco Corporation Missed EPS By 36% And Analysts Are Revising Their Forecasts

The analysts might have been a bit too bullish on Sumco Corporation (TSE:3436), given that the company fell short of expectations when it released its quarterly results last week. Results showed a clear earnings miss, with JP¥98b revenue coming in 3.6% lower than what the analystsexpected. Statutory earnings per share (EPS) of JP¥10.43 missed the mark badly, arriving some 36% below what was expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sumco after the latest results.

See our latest analysis for Sumco

Taking into account the latest results, the consensus forecast from Sumco's 17 analysts is for revenues of JP¥461.1b in 2025. This reflects a solid 15% improvement in revenue compared to the last 12 months. Per-share earnings are expected to climb 20% to JP¥72.59. Before this earnings report, the analysts had been forecasting revenues of JP¥474.2b and earnings per share (EPS) of JP¥80.95 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The consensus price target fell 5.2% to JP¥2,058, with the weaker earnings outlook clearly leading valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Sumco analyst has a price target of JP¥3,270 per share, while the most pessimistic values it at JP¥1,400. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Sumco's growth to accelerate, with the forecast 12% annualised growth to the end of 2025 ranking favourably alongside historical growth of 9.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. Sumco is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Sumco's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Sumco. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Sumco going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for Sumco you should know about.

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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.