TDK shares fell 9.7% after the earnings release, despite record first-half results, as investors focused on weaker-than-expected ICT device production in the second half and the risk it poses to smartphone-related demand. AI data-center sales are tracking ahead of expectations, but that strength may not fully offset the softer ICT outlook.
- First-half net sales rose 31.9% to ¥1,560.6 billion and operating profit increased 41.0% to ¥208.2 billion; both were record highs. The company cited positive foreign-exchange effects of ¥134.4 billion on sales and ¥19.9 billion on operating profit.
- Management expects second-half ICT device production, including smartphones, to be lower than initially projected. It said AI ecosystem sales are ahead of expectations and should remain solid.
- Energy Application Products, TDK’s largest segment, posted sales of ¥867.7 billion, up 33.9%, and operating profit of ¥150.1 billion, up 9.1%. Rechargeable-battery sales benefited from product mix and price revisions despite lower volume from reduced ICT production.
- Magnetic Application Products benefited from AI-data-center-driven HDD demand: segment sales rose about 1.5 times year on year, operating profit 2.8 times, and head and suspension volumes increased 38% and 34%, respectively.
- Passive Components sales rose 25.3% to ¥358 billion, while operating profit increased 2.7 times to ¥39.6 billion, supported by AI data-center and automotive demand.
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