Furukawa Electric Co., Ltd.

Furukawa Electric said on the 24th that it has revised up its consolidated net profit forecast for the second quarter of the fiscal year ending March 2027, covering April to September, to 58 billion yen, 4.51 times the year-earlier figure, from its previous estimate of 42.5 billion yen. The revision reflects an expected gain of about 22 billion yen on the sale of investment securities, booked as an extraordinary profit, from selling its stake in UACJ as part of efforts to reduce cross-shareholdings. The sale is valued at about 28.6 billion yen and is scheduled for the 25th, aimed at cutting policy shareholdings and securing growth capital. The company had initially planned the sale for the third quarter of the fiscal year ending March 2027 or later, but moved it forward to the second quarter after comprehensively weighing market conditions and share price trends. Its full-year earnings forecast remains unchanged, with net profit projected at 105 billion yen.

Furukawa Electric Co., Ltd.'s stock price rose 6.4% from the previous day to 3,844 yen on September 4, with a PBR of 6.19 times. It is still more than 10% below the 4,368 yen level of August 18. The company conducted a 1-for-10 stock split in July 2026, and the stock price is at the level after that. A PBR of 6 times is high for the non-ferrous metals industry, and with an equity ratio of 39.1%, below the industry median of 53.3%, a thin denominator is one factor. According to the first quarter financial results for the fiscal year ending March 2027, sales were 365.2 billion yen, operating profit was 25.4 billion yen, ordinary profit was 30.9 billion yen, and net profit attributable to parent company shareholders was 22.2 billion yen. The full-year plan has been raised from 95 billion yen to 123 billion yen for operating profit, and from 1.46 trillion yen to 1.53 trillion yen for sales. Compared to the previous fiscal year, sales are expected to increase by 17.0% and operating profit by 92.6%, but the first quarter progress is only about 20%, indicating a plan weighted toward the second half. The main reasons for the revenue increase are optical fiber, wire harnesses, and the surge in copper cathode prices. By segment, infrastructure saw a sharp increase in operating profit of 276.1%, and capital investment was also the largest at 25.4 billion yen. On the other hand, the electrical and electronics segment has the largest sales composition ratio at 57.8%, but its profit margin is low at 4.48%, while functional products have a high profit margin of 10.20%.

Furukawa Electric reported first-quarter operating profit for the fiscal year ending March 2027 of 25.4 billion yen, triple the year-earlier level, and raised its full-year operating profit forecast to 123 billion yen from the initial 95 billion yen. Revenue came to 365.2 billion yen, up just over 20 percent from a year earlier, while the operating margin improved to 7.0 percent. The company said growth in data-center-related products and automotive components, surging copper prices, productivity improvements, and sales price adjustments contributed to the results. For the full year, it expects revenue of 1.53 trillion yen, ordinary profit of 143 billion yen, and net profit of 105 billion yen. The stock closed at 4,000 yen on August 25, up 10 percent from the previous day, and has swung sharply over the past month, with a trading range exceeding 50 percent.

Furukawa Electric has revised upward its consolidated net profit forecast for the fiscal year ending March 2027, from the previous 82 billion yen to 105 billion yen. The move reflects stronger-than-expected inquiries for data center-related products amid expanding artificial intelligence demand, significantly exceeding the average analyst estimate of 85.2 billion yen. The full-year operating profit forecast has also been raised from 95 billion yen to 123 billion yen, supported by robust performance in the optical solutions and information components businesses, as well as an increase in equity-method investment income. First-quarter consolidated net profit came to 22.2 billion yen, 4.3 times the year-earlier figure, while operating profit was 25.4 billion yen, triple the prior-year level.

Furukawa Electric announced it will make a total capital investment of 100 billion yen to expand production capacity for optical fiber and optical fiber cable, driven by growing demand for generative AI. The company will acquire manufacturing equipment, land, and buildings in the United States, Brazil, Japan, and India, with operations expected to start sequentially from the second half of fiscal 2028. Through this investment, production capacity for rollable ribbon cable is expected to roughly double in fiber count terms compared with the end of fiscal 2025. Customer purchase intentions, including long-term commitments, have been confirmed, and the impact on consolidated results for the fiscal year ending March 2027 is expected to be minimal.

The global automotive wiring harness market is projected to grow from USD 42.95 billion in 2026 to USD 49.29 billion by 2033, a compound annual growth rate of 2.0 percent. The expansion is driven by the industry's shift from distributed to zonal electrical and electronic architectures, which can reduce wire length and harness complexity by 20 to 30 percent while increasing demand for higher-value, high-voltage, and high-bandwidth harness systems. Wires remain the largest component segment, with copper wires accounting for more than 60 percent of market value, and optical fiber is the fastest-growing material segment for internal combustion engine vehicles as data transmission needs rise. Asia Pacific is expected to lead the market through 2033, supported by large-scale vehicle production in China, Japan, South Korea, and India, where economical passenger cars represent over 80 percent of regional output. Key companies assessed in the report include Yazaki Corporation, Sumitomo Electric Industries, Aptiv, Furukawa Electric, Leoni AG, and Lear Corporation.