FANUC Forecasts Modest Profit Growth Amid Tariff Uncertainty
Robotics giant anticipates 0.4% rise in operating profit for FY26, plans price adjustments
Industrial robotics leader FANUC projects a slight increase in operating profit for the fiscal year ending March 2026, anticipating 159.5 billion yen. This forecast, announced on July 25th, comes as the company prepares to absorb a potential 15% U.S. tariff starting August 1st.
Navigating Trade Tensions
President **Kenji Yamaguchi** stated that the increased costs stemming from tariffs will “basically be asked to pass on prices,” expressing confidence that price adjustments can offset the impact. This marks a shift from April, when the company withheld its forecast, opting to assess the situation meticulously.
FANUC sees potential for a more active capital investment environment in the United States, even with the tariffs. The company highlighted robust demand in sectors like logistics, driven by labor shortages, which could fuel growth for its robotic solutions beyond the traditional automotive industry.
Analysts Undershoot Expectations
The company’s projection falls short of the consensus among 23 analysts surveyed by IBES, who had forecast an average operating profit of 169.6 billion yen. FANUC’s forecast also assumes an exchange rate of 141.15 yen to the dollar and 160.95 yen to the euro for the fiscal year, with a stronger yen factored in from the second quarter.
First Quarter Performance Shows Resilience
For the April-June quarter, FANUC reported a consolidated sales increase of 0.6% year-on-year, reaching 196.3 billion yen. Operating profit saw a significant jump of 28.7%, hitting 42.4 billion yen. “There are some customers who have postponed capital investments due to the impact of US tariffs, but demand is solid,” President **Yamaguchi** noted.
Sales of robot machines and Factory Automation (FA) equipment were strong, particularly in India. However, the robot market in Japan, Europe, and the United States experienced a slowdown, largely attributed to reduced automotive sales. While China and Asia showed substantial growth, the Americas and Europe saw sales declines.
Total orders received decreased by 2.6% from the previous quarter to 205.9 billion yen. Factory automation orders climbed 8.5% to 55 billion yen, influenced by a temporary factor. Robot orders saw a slight dip of 0.3% but are expected to remain at elevated levels.
The global industrial robotics market is expected to grow to $81.15 billion by 2028, indicating continued demand for automation solutions despite economic headwinds (Global Market Insights 2023).