We issued an updated research report on
Fujifilm Holdings Corporation
) on May 27, 2014. The company reported mixed results for the
fiscal fourth quarter of 2014 (ended Mar 31, 2014). Earnings per
ADR (American Depositary Receipt) dropped 27% year over year to 37
cents, while revenues increased 10% year over year to ¥665.6
billion ($6,473.1 million). The rise was attributable to strong
sales in the medical systems business, graphic systems business,
documents business and favorable effects of yen depreciation.
The medical systems business is expected to register a
double-digit year-over-year sales growth in fiscal 2015.
Additionally, the company is optimistic of registering a rise in
the sales of its subsidiaries Toyama Chemical and Fujifilm Pharma.
Moreover, yen exchange rate is expected to remain low in fiscal
2015, which will boost revenues.
Fujifilm has been attempting to increase shareholders value over
the past quarters. In fiscal 2014, the company paid an ordinary
dividend of ¥20.00 per ADR, while another ¥20.00 of ordinary
dividend and ¥10.00 per ADR of special dividend are expected to be
disbursed for fiscal 2014.
However, Fujifilm has been exposed to international
socio-political risks due to its overseas operations. Moreover, the
company is affected by the ever-increasing prices of raw materials,
Fujifilm's diversified product portfolio exposes it to stiff
competition from different players for various products. Thus, it
becomes difficult for the company to manage its prices while
checking costs. Also, the traditional photo imaging business of the
company is expected to decline because of competition from
smartphones and camera-equipped cellphones.
With a market capitalization of $12.8 billion, Fujifilm
currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks
worth considering in the industry include
Kulicke and Soffa Industries, Inc.
). While Cohu and Kulicke and Soffa Industries sport a Zacks Rank
#1 (Strong Buy), Ultratech has a Zacks Rank #2 (Buy).
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