SMK Returns to Profit on Every Line in Q1 as Mobility and Appliance Connectors Grow 13%

A thin operating profit, but a profit

SMK Corporation (TSE: 6798) published consolidated results for the three months to June 30, 2026 on July 28, 2026 under Japanese GAAP. Revenue rose 4.0% to ¥11,472 million and operating profit came in at ¥6 million against a ¥280 million operating loss a year earlier — a margin of essentially zero, but the right side of it. Ordinary profit of ¥307 million and net profit attributable to shareholders of ¥154 million were both comfortably positive against losses of ¥618 million and ¥651 million. Earnings per share were ¥24.40 against a loss of ¥102.88, and comprehensive income reached ¥460 million against a ¥680 million negative.

The gap between a ¥6 million operating profit and a ¥307 million ordinary profit sits in non-operating items, which for a company with this much overseas manufacturing is largely currency. SMK is in the final year of its "SMK Next100" medium-term plan running from FY3/2025 to FY3/2027, which it frames as a period for accelerating structural reform, and it continues to execute the restructuring programme announced on March 25, 2025 — exiting or shrinking unprofitable businesses, concentrating resources on higher-growth, higher-margin areas, and right-sizing headcount.

Connectors up 13%, remote controls down

The CS Division — coaxial, board-to-board and FPC connectors plus jacks — grew revenue 12.9% to ¥5,877 million and operating profit 17.7% to ¥269 million. Mobility was strong on camera-related, battery-related and electrical-equipment parts; home appliances gained on amusement and digital-camera applications; and industrial machinery grew again on renewable energy. Only information and communications fell, as smartphone and tablet applications weakened.

The SCI Division — remote controls, camera modules, sensors and units — saw revenue fall 3.6% to ¥5,592 million but narrowed its operating loss to ¥188 million from ¥365 million. Sanitary and air-conditioner remote controls held up while other housing-equipment remotes fell, leaving appliance revenue roughly flat; mobility declined as vehicle units, e-bike units and switches fell even though camera modules were strong. The Innovation Center, now focused on just two businesses — voice-based brain-health analysis and myoelectric sensors — recorded ¥2 million of revenue and a ¥74 million loss, against ¥20 million and a ¥144 million loss; its communication-module business moved to the SCI Division in June 2025.

Balance sheet and unchanged guidance

Total assets rose 3.2% to ¥59,454 million. Current assets grew 5.1% to ¥32,422 million as cash rose ¥1,347 million, raw materials and supplies ¥810 million and finished goods ¥365 million while receivables fell ¥1,370 million; fixed assets edged up 0.9% to ¥27,032 million. Liabilities rose 6.4% to ¥28,156 million, with current liabilities up 13.8% on ¥1,108 million more trade payables and ¥970 million more short-term borrowing. Net assets were broadly flat at ¥31,298 million, so the equity ratio slipped to 52.6% from 54.1%.

SMK left its full-year FY3/2027 guidance unchanged: revenue of ¥49,000 million (+1.7%), operating profit of ¥800 million (+86.0%), ordinary profit of ¥1,200 million (−3.5%) and net profit of ¥800 million, for earnings per share of ¥126.41. Half-year guidance is revenue of ¥24,000 million (+3.7%) with ¥200 million of operating profit. The first quarter has therefore delivered 23.4% of the revenue target but less than 1% of the operating-profit target — almost the entire year's operating profit still has to be earned. The annual dividend forecast is unchanged at ¥100.00, split ¥50.00 and ¥50.00.

JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.