On Aug 19, 2013, we upgraded our recommendation on
Fujifilm Holdings Corporation
) to Outperform from Neutral, based on the company's solid fiscal
first-quarter 2014 performance.
Why the Upgrade?
Fujifilm reported strong results for the first quarter of
fiscal 2014, with net income of ¥15.0 billion ($151.4 million),
increasing 497.0% year over year, in local currency. Revenues
also increased 9.7% year over year to ¥568.7 billion ($5,759.4
million). The increase in revenues was on the back of strong
sales in the documents business, medical systems business as well
as the flat panel display business.
Fujifilm's pharmaceuticals business witnessed a double-digit
year-over-year hike in the quarter, pushing the total sales up.
The business is expected to grow further in the coming
Additionally, the company's inorganic growth has been
tremendous in the reported quarter. The Sonosite acquisition in
Mar 2012 contributed immensely to the Medical Systems division of
Information Solutions, driving the segment's growth in fiscal
2013 as well as fiscal first quarter of 2014.
The company recently launched products ranging from lenses to
printers. In order to tap the growth potential of the lens
business, the company started operations of its new optical lens
factory, FUJIFILM Optics Philippines Inc., in Jul 2013.
Also, Fujifilm is managing its costs efficiently, leading to
higher margins. This, we believe, will position Fujifilm as a
sustainable and profitable corporation with a larger market share
in the quarters ahead.
Other Stocks to Consider
Fujifilm currently carries a Zacks Rank #1 (Strong Buy). Other
stocks worth a watch in the technology industry are
Alliance Fiber Optic Products Inc.
Axcelis Technologies Inc.
). While Alliance Fiber carries a Zacks Rank #1 (Strong Buy),
Axcelis Technologies and Coherent carry a Zacks Rank #2
AXCELIS TECH (ACLS): Free Stock Analysis
ALLIANCE FIBER (AFOP): Free Stock Analysis
COHERENT INC (COHR): Free Stock Analysis
FUJIFILM HLDGS (FUJIY): Free Stock Analysis
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