NTN Q1 Net Profit Jumps 62% as Japan Bearings Recovery Offsets Americas Slide

NTN Corporation (TSE: 6472), one of Japan's largest bearing manufacturers, reported consolidated results for the first quarter of the fiscal year ending March 2027 — the three months from April 1 to June 30, 2026 — under Japanese GAAP. Revenue rose 6.7% to ¥212,279 million, operating profit climbed 19.2% to ¥8,319 million, ordinary profit surged 57.5% to ¥6,350 million, and net profit attributable to owners of the parent jumped 61.9% to ¥1,928 million. Basic earnings per share came in at ¥3.24, up from ¥2.25. Comprehensive income multiplied more than eight-fold to ¥6,880 million from ¥791 million. Management credited the profit gain to passing higher prices through to customers and to cutting variable costs — an operating-leverage story rather than a demand story.

A sharply divided regional picture

The quarter's headline improvement came almost entirely from two of NTN's four regions. In Japan, revenue rose 3.1% to ¥86,349 million but segment profit surged 772.0% to ¥4,168 million — close to a nine-fold increase — as aftermarket bearing demand recovered, OEM sales rose for both industrial machinery and automotive customers, and constant-velocity joint (CVJ) and axle volumes picked up in both channels. Asia and other delivered revenue of ¥42,476 million (+7.2%) and the group's largest segment profit at ¥4,343 million (+13.2%), helped by variable-cost reductions and currency.

The two Western regions moved the other way. Americas revenue rose 7.2% to ¥69,273 million but segment profit collapsed 68.1% to ¥519 million: aftermarket bearings grew, yet OEM demand fell across both industrial and automotive channels, and CVJ/axle declined in both. In Europe, revenue rose 8.7% to ¥51,399 million while the segment posted a loss of ¥352 million, slightly wider than the prior year's ¥327 million loss. Crucially, the revenue growth in both regions was driven largely by currency translation rather than volume — price pass-through and fixed-cost cuts were not enough to offset the underlying decline. NTN cited a European backdrop showing signs of pickup but with parts of the region, notably Germany, stalled.

Bearings recover, CVJ and axle lag

Split by business type, the divergence is between aftermarket and OEM. The bearings and other business generated revenue of ¥89,984 million (+8.4%) and operating profit of ¥2,979 million (+31.6%), as recovering aftermarket demand and currency more than offset higher personnel and variable costs. The larger CVJ and axle business posted revenue of ¥122,294 million, supported by currency despite weaker automotive OEM demand worldwide. That pattern — replacement parts holding up while new-vehicle and new-machine build rates soften — runs through every region in the disclosure, and it is the reason NTN's Japanese and Asian aftermarket exposure carried the quarter.

DRIVE NTN100 Final and a still-thin balance sheet

The results land in the closing phase of "DRIVE NTN100" Final, the medium-term plan launched in April 2024 under President Eiichi Ukai. The plan pushes an accelerated transformation of the business structure centred on production reorganisation, aiming to complete the company's turnaround while raising earning power through what NTN calls SQCCD — Safety, Quality, Compliance, Cost & Cash, and Delivery & Development. On the balance sheet, total assets slipped to ¥866,990 million at June 30 from ¥878,676 million at March 31, while net assets rose to ¥314,968 million from ¥311,389 million and shareholders' equity reached ¥299,917 million. The equity ratio improved to 34.6% from 33.8% — progress, but still a relatively thin cushion for a capital-intensive global manufacturer.

Guidance unchanged, dividend lifted to ¥13.00

NTN left its full-year FY3/2027 forecast untouched, and its shape is unusual: revenue of ¥810.0 billion (-2.0%) and ordinary profit of ¥21.0 billion (-10.6%) are guided lower year on year, while operating profit of ¥33.0 billion (+6.3%) and net profit of ¥15.0 billion (+16.5%) are guided higher. In other words, management expects the core operating improvement to continue but to be given back below the operating line — chiefly in non-operating items such as foreign-exchange and financing effects — before recovering again at the bottom line. Forecast EPS is ¥25.23, on a weighted-average share count that has risen sharply to 594,508,913 from 529,426,829 a year earlier. The annual dividend forecast is also unchanged at ¥13.00 (¥6.50 interim plus ¥6.50 year-end), a ¥2.00 increase on the ¥11.00 paid for FY3/2026.

NTN reported no change in the scope of consolidation, applied special quarterly accounting treatment, and noted that the quarterly statements were not subject to auditor review.

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.