On Jul 4, 2013, we upgraded photographic image company,
Fujifilm Holdings Corporation
) to Neutral from Underperform based on the company's strong
fiscal fourth quarter 2013 results.
Why the Upgrade?
Fujifilm's net income in the fiscal fourth quarter of 2013
increased 26.7% year over year to ¥25.4 billion ($275.7 million).
Revenues in the quarter increased 4.6% year over year to ¥603.5
billion ($6,546.5 million). The launch of new products paved the
way for the increase.
Following such strong results, Fujifilm expects revenues in
fiscal 2014 to be ¥2,350.0 billion, up 6.1% year over year.
Operating income is expected to be ¥140.0 million, an increase of
22.7% over fiscal 2013. Also, Fujifilm expects its net income for
the coming fiscal to be ¥70.0 billion, increasing 29.0% year over
Various acquisitions undertaken by Fujifilm also helped the
company prosper. Fujifilm acquired Sonosite in Mar 2012, which
has been contributing immensely to the company's business since
then. Moreover, Fujifilm also acquired the BPO division of
Australia-based Salmat last August. Fujifilm intends to utilize
the division to expand its reach in the Asia-Oceana region.
Fujifilm continues to expand its diverse operations, with
sales in the pharmaceuticals business of the company jumping 20%
year over year in fiscal 2013. The company expects to continue
deriving significant revenues from the segments in the coming
quarters, especially pharmaceuticals.
However, Fujifilm's presence outside Japan makes it prone to
various economic and socio political risks in the regions of
operations. The recent economic downturn in Europe was a major
blow to the company's financials in fiscal 2013. Moreover, the
company's results are hurt by the ever increasing prices of raw
materials. This may lead to high cost of production, thereby
Other Stocks to Consider
Fujifilm currently carries a Zacks Rank #1 (Strong Buy). Some
of the companies that compete with Fujifilm in diverse operations
Alliance Fiber Optic Products Inc.
), carrying a Zacks Rank #1 (Strong Buy), and
) both carrying a Zacks Rank #2 (Buy).
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FUJIFILM HLDGS (FUJIY): Free Stock Analysis
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