NTN: Lifts FY2027 revenue view to ¥825bn, flags ¥4.4bn merger costs

NTN lifted its revenue forecast for the year ending March 2027 but left its forecasts for operating profit, ordinary profit and net income attributable to owners of the parent unchanged. The revised forecasts and prior-year results are as follows.

The revenue forecast was raised by ¥15 billion, or 1.9%. The revisions to all three profit measures were zero, or 0.0%. NTN has not passed the revenue increase through to its profit forecasts, maintaining its current outlook with integration costs included.

NTN said increased sales and foreign-exchange effects, among other factors, are expected to lift revenue above its previous forecast. It kept operating and other profit forecasts unchanged because it expects the benefits of higher scale and other factors to absorb the costs of its management integration with NSK.

• Revenue growth drivers: NTN expects higher sales and foreign-exchange effects, among other factors.
• Profit forecasts maintained: Integration costs are included, with the effects of increased scale and other factors expected to offset them.
• Exchange-rate assumptions: From the third quarter onward, NTN assumes ¥150 to the U.S. dollar and ¥175 to the euro.

The revenue upgrade does not translate directly into higher profit forecasts. Investors will be watching how much of the integration costs NTN can absorb, as well as whether sales trends and exchange rates stay within its assumptions.

Compared with the prior-year results, NTN's latest forecast puts revenue ¥1.344 billion lower and operating profit ¥1.966 billion higher. Ordinary profit is forecast to fall ¥2.484 billion, while net income is expected to rise ¥2.129 billion, showing differing trends across profit measures.

The revenue increase from the previous forecast stands out, but revenue is still expected to edge down year on year. Ordinary profit is also forecast below the prior-year level, so the revision should not be read as across-the-board growth. Investors should assess the integration costs and performance at each profit level separately.