Daikin Earnings: Results Upbeat, Fiscal 2024 Guidance Lifted; Shares Still Cheap

Narrow-moat Daikin Industries reported strong numbers for the first half of fiscal 2024 (ended September 2024) as revenue and operating profit came in above our estimates and management’s prior guidance. Robust demand growth in industrial applied products in the US and residential products in emerging regions such as South Asia played crucial roles, and effective selling price increases and cost reductions supported operating margin. As a result, management raised revenue and operating profit guidance for fiscal 2024 by 5% and 1%, respectively, as it expects sales value expansion in key regions to outshine raw material cost hikes and currency headwinds.