TED Q1 FY2027: Operating Profit Soars 179.5%, Full-Year Forecast Raised

In the first quarter of FY2027 (April–June 2026), TED reported revenue of ¥60,322 million, up 33.6% from the same period a year earlier. Operating profit surged 179.5% to ¥4,066 million, while ordinary profit rose 127.8% to ¥3,908 million and net income attributable to shareholders climbed 117.7% to ¥2,651 million. The robust performance was fueled by expanding AI-related semiconductor demand, with customers placing advance orders amid concerns over longer lead times and rising component prices. Gross margin improved to 15.5%, while selling, general and administrative expenses were kept in check, helping operating profit nearly triple year on year.

Based on these strong results, TED raised its full-year forecast for FY2027, now projecting revenue of ¥240,000 million (up 17.8% from the previous year), ordinary profit of ¥13,600 million (up 39.5%), and net profit of ¥9,400 million (up 19.9%), all expected to mark record highs.

The semiconductor and electronic devices segment generated sales of ¥50,354 million, a 38.4% year-on-year increase. Segment profit skyrocketed 943.5% to ¥2,374 million, driven by AI demand and a favorable product mix that lifted margins. The computer systems segment posted revenue of ¥9,967 million (up 14.0%) and segment profit of ¥1,534 million (up 3.1%), as network equipment and security sales benefited from corporate digital transformation investments, though higher SG&A limited profit growth.

TED raised its full-year earnings guidance following the strong first quarter. The company now forecasts revenue of ¥240,000 million (up 17.8% compared with an estimated ¥203,700 million in FY2026), ordinary profit of ¥13,600 million (up 39.5% from approximately ¥9,750 million), and net profit of ¥9,400 million (up 19.9% from about ¥7,840 million). The revision implies an ¥833 million increase in net profit, equivalent to a 71.6% upward adjustment, largely attributed to the semiconductor segment’s momentum. Management expects AI and semiconductor demand to remain solid through the fiscal year, supporting accelerating top- and bottom-line growth.

As of the end of the first quarter, total assets stood at ¥163,594 million, up ¥1,382 million from the prior fiscal year-end, as higher receivables offset a decline in cash. Liabilities increased ¥777 million to ¥109,232 million, mainly due to higher short-term borrowings. The equity ratio edged up 0.1 percentage point to 32.7%.

Operating cash flow was negative ¥3,964 million, reflecting an increase in working capital tied to sales growth. Investing cash flow was a negative ¥272 million, while financing activities generated ¥2,056 million through short-term borrowing and commercial paper issuance. Cash and cash equivalents fell to ¥5,445 million.

TED raised its annual dividend forecast for FY2027 to ¥129 per share (interim ¥60, year-end ¥69), up from ¥107 in FY2026, an increase of ¥22, underscoring a commitment to shareholder returns. The company did not buy back own shares during the quarter but continues to use a BIP trust for executive compensation.

TED identifies several key risks that could affect its performance:

• Geopolitical risks: Prolonged conflicts, such as in the Middle East, may raise energy and material costs, weighing on earnings.
• Foreign exchange: While a weaker yen lifts revenue and profits, a sharp yen appreciation could have the opposite effect.
• Semiconductor market conditions: AI-related demand is robust, but any sudden market shifts or customer inventory corrections could reduce sales.
• Intensifying competition: As a semiconductor trading company, TED faces price and share competition from domestic and overseas rivals.
• Information security: The computer systems business handles confidential data, creating potential leakage risks.

The company seeks to mitigate these risks by strengthening relationships with suppliers and customers, optimizing inventory levels, and using interest rate and currency hedges, with particular attention to supply-demand balance in its semiconductor operations.