Fanuc Earnings: Rapid Growth in Asia to Sooth the Near-Term Pain in the US and Europe

Wide-moat Fanuc’s March-quarter sales were JPY 212 billion, up 7.6% year on year and 6.7% sequentially. This exceeded our expectation of JPY 205 billion with robust sales in the robot and robomachine segments, which grew 10% and 25% sequentially, respectively. However, this was partially offset by the disappointing sales in the FA segment, which declined 1.3% sequentially. Based on the mixed results, we believe the FA and robot segments will recover more moderately than we had expected, as many companies will take a wait-and-see approach amid the uncertainty fueled by the US tariffs issue. We trimmed our sales forecasts for fiscal 2025 (ending March 2026) by 5.3% and 3.8%, respectively. On the other hand, we raise our sales forecast for the robomachine segment by 14.5%, as we believe the ongoing shift of production lines from mainland China to India and Vietnam will continue to boost the sales of robomachine products, such as Robodrill. Overall, despite the short-term turmoil caused by the unstable macroenvironment, we largely maintain our earnings forecasts and keep our fair value estimate for Fanuc at JPY 5,200.