JTEKT Q1 Profit More Than Doubles to ¥13.8 Billion as Automotive Segment Profit Jumps 158%

JTEKT Corporation (TSE: 6473), the Toyota-group manufacturer of steering systems, driveline components, bearings and machine tools, reported consolidated results for the first quarter of the year to March 2027 — the three months ended June 30, 2026 — under IFRS. Revenue rose 8.2% to ¥491,973 million. Business profit, which JTEKT defines as revenue less cost of sales and selling, general and administrative expenses, climbed 62.1% to ¥22,746 million, and operating profit rose 68.6% to ¥22,811 million. Profit before tax more than doubled, up 108.8% to ¥21,560 million, and profit attributable to owners of the parent rose 112.5% to ¥13,833 million. Basic earnings per share were ¥43.45 against ¥20.45 a year earlier; diluted EPS was ¥43.43 against ¥20.44.

Automotive does the heavy lifting

All three reporting segments grew revenue, but only one grew profit. Automotive — steering, driveline and related components — lifted revenue 9.7% to ¥355,287 million from ¥323,882 million and segment profit 158.1% to ¥15,762 million from ¥6,106 million. The company attributes the gain to a weaker yen and higher sales in Japan, North America and Asia, which more than offset lower volumes in China, with the profit swing driven by currency and cost-reduction work. Industrial machinery and bearings revenue edged up 2.4% to ¥88,169 million from ¥86,107 million despite the divestment of the European needle roller bearing business during the prior fiscal year, but segment profit fell 11.1% to ¥3,678 million from ¥4,140 million as U.S. tariffs outweighed the benefits of currency, cost reduction and structural reform. Machine tools revenue rose 8.3% to ¥48,516 million from ¥44,805 million on currency and stronger North American demand, while segment profit slipped 15.0% to ¥3,299 million from ¥3,879 million on higher costs.

Margins widen and finance costs shrink

Gross profit rose 19.4% to ¥82,525 million, lifting the gross margin to 16.8% from 15.2%, while SG&A grew a slower 8.5% to ¥59,779 million. That combination pushed the business-profit margin to 4.6% from 3.1%. Below the operating line, the net finance charge narrowed sharply to ¥1,205 million from ¥3,151 million — finance income of ¥2,205 million against costs of ¥3,410 million, versus ¥4,160 million and ¥7,311 million a year ago — which is what turned a 68.6% operating-profit gain into a 108.8% pre-tax gain. Income tax expense of ¥7,146 million represented an effective rate of 33.1%, little changed from 32.5%, and non-controlling interests took ¥580 million.

Guidance untouched despite a fast start

Management left the full-year FY3/2027 forecast published on April 28 completely unchanged: revenue of ¥1,880,000 million (−2.3%), business profit of ¥90,000 million (+18.9%), operating profit of ¥75,000 million (+201.8%), profit before tax of ¥70,000 million (+155.7%), profit attributable to owners of the parent of ¥50,000 million (+317.6%) and basic EPS of ¥157.07. The quarter already banks 30.4% of the full-year operating-profit target and 27.7% of the net-profit target, while annualising Q1 revenue would land roughly 4.7% above the guided top line. The headline tripling at the operating level says as much about the comparator as about this year: the guided percentages imply FY3/2026 operating profit of about ¥24.9 billion against business profit of about ¥75.7 billion, a gap of roughly ¥51 billion in net other expenses that this quarterly release does not break out. The forecast assumes ¥156 to the U.S. dollar and ¥181 to the euro for the first quarter, easing to ¥155 and ¥180 from the second quarter onward.

Dividend heading 17% higher

The dividend forecast was also left as previously announced. JTEKT plans an annual payout of ¥70.00 per share for FY3/2027 — ¥35.00 at the interim and ¥35.00 at year-end — up from ¥60.00 (¥30.00 plus ¥30.00) for FY3/2026, a 16.7% increase. Against guided EPS of ¥157.07 that implies a payout ratio of about 44.6%. The company had 318,608,107 shares issued at quarter-end, of which 264,824 were held in treasury, and a weighted average of 318,332,300 shares was used for the EPS calculation.

Balance sheet and cash flow

Total assets stood at ¥1,604,198 million at June 30, up ¥26,502 million from March 31, as cash and cash equivalents built to ¥168,471 million from ¥137,550 million while trade and other receivables fell. Liabilities rose ¥6,306 million to ¥758,772 million on higher bonds, borrowings and provisions, and total equity rose ¥20,195 million to ¥845,426 million; equity attributable to owners of the parent reached ¥809,376 million, an equity ratio of 50.5% against 50.1% three months earlier. Operating cash flow was ¥43,316 million (from ¥36,004 million), the investing outflow narrowed to ¥6,974 million (from ¥22,572 million), and financing was a ¥6,841 million outflow on dividend payments against a ¥5,780 million inflow a year ago — leaving free cash flow of roughly ¥36.3 billion versus ¥13.4 billion. Total comprehensive income swung to ¥29,366 million from a ¥8,222 million loss, helped by a ¥7,758 million foreign-currency translation gain and ¥6,433 million of gains on equity instruments designated at FVTOCI.

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.