Bearings and Drivetrain Components Q1 FY2027: NSK's surge widens profit gap
Takeaway
Growth momentum and earnings power diverged across the three companies.
In Q1 FY2027, all three Bearings and Drivetrain Components makers grew revenue and profit. NSK led growth, while JTEKT had the largest operating profit and NTN the lowest margin; NSK's gains also reflect its newly consolidated steering business.
Industry Overview
- All three companies posted revenue and profit growth. NSK's revenue rose 30.6% year on year, far outpacing NTN's 6.7% increase.
- The weaker yen supported revenue and earnings across the group. At NTN, cost reductions and price pass-throughs also boosted profit, alongside currency translation effects.
- Broader AI investment supported NSK's industrial machinery bearings, amid stronger demand from semiconductor manufacturing equipment and machine tools.
- In autos, JTEKT's automotive business delivered a sharp profit increase, helped by the weaker yen, cost improvements and structural reforms.
- Profit margins diverged: NSK led at 5.9%, followed by JTEKT at 4.6%, while NTN was lowest at 3.9%.
Revenue Ranking
JTEKT led in revenue scale, but NSK posted the strongest year-on-year growth. The consolidation of its steering business helped separate the rankings for scale and growth.
Operating Profit Ranking
JTEKT ranked first in operating profit and grew 68.6% year on year. NSK recorded faster growth, highlighting the difference between business scale and recovery momentum.
Operating Margin Ranking
NSK led with a 5.9% operating margin, while NTN was last at 3.9%. JTEKT, despite its larger revenue scale, posted a 4.6% margin, pointing to differences in profitability.
Winner and Loser
NSK led in both growth and operating margin. Revenue rose 30.6% year on year to ¥255.6 billion, well ahead of JTEKT's 8.2% increase and NTN's 6.7%. Operating profit climbed 212.3% to ¥15 billion, also exceeding JTEKT's 68.6% growth and NTN's 19.2%. NSK's 5.9% operating margin topped JTEKT's 4.6% and NTN's 3.9%.
Consolidation helped drive the growth ranking: NSK brought its steering business into the group and also benefited from stronger industrial machinery demand. JTEKT, meanwhile, ranked first in operating profit at ¥22.8 billion, giving it the edge in scale and absolute profit.
NTN faced the toughest quarter. Its operating profit rose 19.2% to ¥8.3 billion, the slowest increase among the three. Weaker original equipment manufacturer demand in the Americas and poor performance in Europe weighed on results. NTN also had the lowest revenue growth, at 6.7%, and the lowest margin, at 3.9%.
Winner
NSK
Laggard
NTN
Strategic Moves to Watch
- NSK benefited from its steering business, which became a consolidated subsidiary in September 2025. Industrial machinery demand also grew on the back of AI investment, prompting the company to raise its full-year forecast. Operating profit rose 212.3% year on year, the fastest growth among the three.
- NTN increased profit through cost reductions, price pass-throughs and a recovery in aftermarket sales. Operating profit rose 19.2% to ¥8.3 billion. The company maintained its full-year forecast and expects the weaker yen to provide an upside in the second half.
- JTEKT was propelled by a recovery in its automotive business. Operating profit rose 68.6% to ¥22.8 billion, the highest total among the three. Cost improvements also contributed, but the full-year forecast was unchanged. Operating profit had reached 30.4% of the forecast.
Year-on-Year Revenue Growth
NSK's revenue rose 30.6% year on year, far outpacing its peers. The consolidation of the steering business and stronger industrial machinery demand contributed to the gap.
Year-on-Year Net Income Growth
NSK led net income growth, up 795.6% year on year. The sharp increase also reflects the prior-year base and the impact of consolidation, so it should be viewed alongside profit amounts and operating margins.
Common Industry Risks
- Exposure to currency movements. The weaker yen supported all three companies, but a turn toward yen appreciation could pressure profits.
- Shifts in automotive and industrial machinery demand. NTN faced soft OEM demand in the Americas, while continued AI investment is important to demand for NSK's industrial machinery products.
- Regional differences in profitability. NTN remained in the red in Europe, while lower earnings in JTEKT's industrial machinery, bearings and machine tool businesses are also a challenge.
- Tariffs and rising costs. Tariff costs weighed on some JTEKT businesses, making continued cost improvements essential.
- NSK will need to demonstrate the benefits of integrating its newly consolidated business. The sharp year-on-year profit increase also reflects a change in the scope of consolidation.
Shifting Rankings and Structural Trends
JTEKT retained its lead among the three in both revenue and operating profit by amount. NSK, however, ranked first in operating margin at 5.9%, underscoring that scale and profitability do not move in lockstep. Its margin was 1.3 percentage points above JTEKT's and 2.0 points above NTN's.
This quarter, NSK's rapid growth and NTN's low margin stood out. But NSK's growth also reflects a broader scope of consolidation. Whether JTEKT can sustain its automotive recovery will also influence future rankings.
What Job Seekers Should Know
The three companies' results show how priorities differ even within the same machinery sector. At NSK, both bearings and steering are in focus; at NTN, the emphasis is on cost improvements and regional earnings recovery; at JTEKT, the key issue is improvement in the automotive business.
Demand for AI-related equipment and changes in the auto market can affect work in research and development, manufacturing and sales. When choosing an employer, candidates should look beyond companywide growth and assess demand and profitability in the business tied to their preferred role.