Company Reports

Fanuc is well-positioned for long-term, secular growth in the industrial robotics industry, as the world’s largest computer numerical control and industrial robotics manufacturer. The factory automation division makes up approximately one-third of total sales and has the leading global market share with its CNC automated control software for machine tools. With an established reputation and record that support its ability to maintain a 50% market share, this business should grow along with its machine tool manufacturer customers, as the software/control console will differentiate the quality of machine tools and meet increasing demands for extremely high precision by end users.

Fanuc reported fiscal 2026 (ending March 2027) first-quarter sales of JPY 231.0 billion, up 17.7% year on year, and operating profit of JPY 53.5 billion, up 26.1%. Orders rose 36.9% to JPY 281.9 billion. Full-year sales and operating-profit guidance rose 4.2% and 2.7%; shares fell about 15%.

Fanuc posted record sales of JPY 857 billion, up 8% year on year, with operating margin improving 150 basis points to 21.4% in fiscal 2025. For fiscal 2026, management expects 6% sales growth and margin expansion to 23.3%. Shares surged 16% the next trading day.

Fanuc is well positioned for long-term, secular growth in the industrial robotics industry, as the world’s largest computer numerical control and industrial robotics manufacturer. The factory automation division makes up approximately one-third of total sales and has the leading global market share with its CNC automated control software for machine tools. With an established reputation and record that support its ability to maintain a 50% market share, this business should grow along with its machine tool manufacturer customers, as the software/control console will differentiate the quality of machine tools and meet increasing demands for extremely high precision by end users.

Fanuc is well-positioned for long-term, secular growth in the industrial robotics industry, as the world’s largest computer numerical control and industrial robotics manufacturer. The FA division currently makes up approximately one third of total sales and has the leading global market share with its CNCs, which is the automated control software of machine tools. With an established reputation and record that supports its ability to maintain a 50% market share, we expect this business to grow along with its machine tool manufacturer customers, as the software/control console will differentiate the quality of machine tools and meet increasing demands for extremely high precision by end-users.

Wide-moat Fanuc reported December-quarter sales growth of 20% year on year and operating profit growth of 10%. The company raised fiscal 2025 (ending March 2026) sales guidance by 3% to JPY 840 billion, while lowering operating profit guidance by 2% to JPY 173 billion.

Fanuc is well-positioned for long-term, secular growth in the industrial robotics industry, as the world’s largest computer numerical control and industrial robotics manufacturer. The FA division currently makes up approximately one third of total sales and has the leading global market share with its CNCs, which is the automated control software of machine tools. With an established reputation and record that supports its ability to maintain a 50% market share, we expect this business to grow along with its machine tool manufacturer customers, as the software/control console will differentiate the quality of machine tools and meet increasing demands for extremely high precision by end-users.

Fanuc posted its results for the September quarter. Sales rose 10% year on year, mainly driven by a 16% increase in robot sales, while operating profit grew 2%. Management raised fiscal 2025 (ending March 2026) guidance of sales and operating profit by 1% and 10%, respectively.

Fanuc reported June-quarter results with sales up 0.6% year on year and operating profit jumping 28.7% due to cost controls and an accounting factor from yen appreciation. For fiscal 2025 (ending March 2026), company guidance includes a sales increase of 1.2% and operating profit up 0.4%.

Fanuc is well positioned for long-term, secular growth in the industrial robotics industry, as the world’s largest computer numerical control and industrial robotics manufacturer. The FA division currently makes up approximately one third of total sales and has the leading global market share with its CNCs, which is the automated control software of machine tools. With an established reputation and record that supports its ability to maintain a 50% market share, we expect this business to grow along with its machine tool manufacturer customers, as the software/control console will differentiate the quality of machine tools and meet increasing demands for extremely high precision by end-users.

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.

Fanuc is well positioned for long-term, secular growth in the industrial robotics industry, as the world’s largest computer numerical control and industrial robotics manufacturer. The FA division currently makes up approximately one third of total sales and has the leading global market share with its CNCs, which is the automated control software of machine tools. With an established reputation and record that supports its ability to maintain a 50% market share, we expect this business to grow along with its machine tool manufacturer customers, as the software/control console will differentiate the quality of machine tools and meet increasing demands for extremely high precision by end-users.

Fanuc quarterly orders surpassed JPY 200 billion in the December quarter for the first time in seven quarters. Besides continuous firm FA and Robomachine orders, which grew 34% and 72% year on year, respectively, we are also encouraged by the robot orders that grew 8.6% year on year after six quarters of decline. We see that the Chinese market supports demands for robot products. Fanuc robot sales in China bottomed out and achieved 33% quarter-on-quarter growth. Amid weak sentiment on EV investment, the company grew its wide-moat robot business by expanding its zero downtime proven products to other industries such as electrical/electronic manufacturing, food manufacturing, and logistics in China. We believe Fanuc’s shares are undervalued as the market is still conservative about the midterm outlook for its robot business. We reiterate our fiscal 2025 growth forecast for the robot segment at 11% and reiterate a CAGR of 8% for the robot business between 2024 and 2028. We see operating margin gradually improving year by year from 19% to 24.5% in 2028 as demand for robot products picks up and the utilization rate recovers. We maintain our JPY 5,300 fair value estimate for Fanuc.

Fanuc is well positioned for long-term, secular growth in the industrial robotics industry, as the world’s largest computer numerical control and industrial robotics manufacturer. The FA division currently makes up approximately one third of total sales and has the leading global market share with its CNCs, which is the automated control software of machine tools. With an established reputation and record that supports its ability to maintain a 50% market share, we expect this business to grow along with its machine tool manufacturer customers, as the software/control console will differentiate the quality of machine tools and meet increasing demands for extremely high precision by end-users.

While Fanuc Robot orders were down 6% year over year in the September quarter, indicating that the recovery in robotics is slower than we had anticipated, this is largely offset by solid FA orders and a strong recovery in Robomachine orders, which were up 15% and 56%, respectively. In addition, the operating margin improved 4.9 percentage points to 22.1% year on year, which we believe reflects an improved product mix and utilization. Combined with lower inventory levels, we believe the September quarter numbers support our view that the ongoing inventory correction is nearing an end. We believe Fanuc's shares are undervalued as the market is too pessimistic about the midterm outlook for its robot business. We lower our fiscal 2024 growth forecast for the robot segment to negative 14% from negative 9%, reflecting near-term weakness on demand, but we maintain a CAGR of 8% between 2024 and 2028, as we see there are still plenty of spaces for robot products to grow in key markets such as China. On the other hand, we raise our operating margin to 20% from 18.7% for fiscal-year 2024 in reflection of continuously improving product mix. As the recovery is in line with our expectations, and the shortfall in robot sales will be offset by the highly profitable FA and Robomachine businesses, we maintain our fair value estimate for Fanuc at JPY 5,200.

Fanuc is well positioned for long-term, secular growth in the industrial robotics industry, as the world’s largest computer numerical control and industrial robotics manufacturer. The FA division currently makes up approximately one third of total sales and has the leading global market share with its CNCs, which is the automated control software of machine tools. With an established reputation and record that supports its ability to maintain a 50% market share, we expect this business to grow along with its machine tool manufacturer customers, as the software/control console will differentiate the quality of machine tools and meet increasing demands for extremely high precision by end-users.

Fanuc is well positioned for long-term, secular growth in the industrial robotics industry, as the world’s largest computer numerical control and industrial robotics manufacturer. The FA division currently makes up approximately one third of total sales and has the leading global market share with its CNCs, which is the automated control software of machine tools. With an established reputation and record that supports its ability to maintain a 50% market share, we expect this business to grow along with its machine tool manufacturer customers, as the software/control console will differentiate the quality of machine tools and meet increasing demands for extremely high precision by end-users.

Fanuc’s June-quarter orders for the factory automation, or FA, segment (which sells computer numerical controls, or CNCs) and robomachine segment grew 22% and 31%, respectively, which surpassed what we had anticipated. However, we think the stronger-than-expected order growth came from front-loaded orders in anticipation of the Chinese government’s financial support for industrial equipment upgrades. As such, our outlook remains unchanged, and we continue to forecast revenue to remain flat year on year for fiscal 2024 (ending March 2025) and maintain our fair value estimate at JPY 5,200 per share. Our projection for 2024 assumes both FA and robomachine sales to rise 12%, while robot sales decline 9%. Although the 11% sequential robot order increase in the June quarter suggests orders had bottomed in the March quarter, Fanuc’s book/bill ratio has been below 1.0 for the past five quarters, and we expect most of the electric vehicle investments in key markets like the US and Europe will be postponed to the first half of fiscal 2025.

Fanuc is well positioned for long-term, secular growth in the industrial robotics industry, as the world’s largest computer numerical control and industrial robotics manufacturer. The FA division currently makes up approximately one third of total sales and has the leading global market share with its CNCs, which is the automated control software of machine tools. With an established reputation and record that supports its ability to maintain a 50% market share, we expect this business to grow along with its machine tool manufacturer customers, as the software/control console will differentiate the quality of machine tools and meet increasing demands for extremely high precision by end-users.

Fanuc’s robot orders, which have been resilient in recent quarters, fell 7% sequentially in the March quarter, which we believe reflects a slowdown in capital spending, contributed by sluggish electric vehicle, or EV, demand. As a result, we expect the inventory correction for robots to continue at least through the end of the year, and consequently lower our fiscal 2024 (ending March 2025) sales forecast by 2% as well as our operating income forecast by 9%. Meanwhile, we largely maintain our forecasts after fiscal 2025 as well as our fair value estimate for Fanuc of JPY 5,200 per share, as our medium-term outlook remains intact. We expect sales to grow 10% in fiscal 2025, driven by the recovery in robot sales, followed by a steady-state compound annual growth rate of about 6% through 2028. We think the market leader with industrial robots is strongly positioned for industrial automation demand to deal with rising wages/labor shortages as well as further EV/hybrid vehicle investments by its existing automobile original equipment manufacturer customers, which is underestimated by the market.