Japan's Big 3 Precision and Medical Device Makers Q1 FY2027: Terumo tops sales and profit

• All three companies increased sales year on year: Terumo was up 19.9%, Olympus 16.4% and HOYA 16.0%. Their average growth was 17.4%, as resilient demand provided a common tailwind.
• Overseas demand and the weaker yen supported results. Olympus benefited from strong demand for endoscopes in North America and Europe, while currency movements also helped Terumo. Growth in overseas markets can feed directly into earnings for the group.
• Profit growth varied. Operating profit rose 60.1% at Terumo, 74.4% at Olympus and 30.0% at HOYA. Terumo's result also included one-off factors, including a settlement payment.
• HOYA led the group with a 32.3% operating margin. High profitability in its Information and Communications business, along with improvement in Life Care, lifted the margin.
• The companies have different business mixes. Terumo and Olympus are centered on medical devices, while HOYA combines healthcare-related operations with Information and Communications businesses, including semiconductor-related products. Those different earnings sources are reflected in their margins.

Terumo led in both sales and operating profit. Revenue was ¥311.8 billion, up 19.9% year on year, ahead of HOYA at ¥255.7 billion, up 16.0%, and Olympus at ¥240.4 billion, up 16.4%. Terumo's operating profit rose 60.1% to ¥89.5 billion, topping HOYA's ¥82.6 billion, up 30.0%.

Terumo's operating profit was boosted by a ¥20.1 billion settlement payment received and a refund of U.S. tariffs. It is too early to treat the full increase as growth in the core business: investors need to separate underlying performance from one-off factors.

HOYA was strongest on operating margin. Its 32.3% exceeded Terumo's 28.7% and Olympus' 12.0%. Profit from its ordinary operations also stood out, rising 24.4% to ¥82.3 billion.

Olympus was the weakest performer on profitability, with the lowest margin. Its operating profit climbed 74.4% to ¥29.0 billion, the fastest growth rate among the three, but remained well below Terumo's ¥89.5 billion and HOYA's ¥82.6 billion. The Surgical business remained in the red, leaving profitability improvement a key challenge. At the same time, Olympus led in net profit growth, up 112.5%. The contrast between profit growth and profit margins was stark.

• Terumo increased sales in every segment, led by its cardiovascular business. A settlement payment and U.S. tariff refunds also lifted profit, prompting the company to raise its full-year forecast. It continues to develop new businesses, including Organ Technologies, although this period's earnings included one-off gains.
• Olympus saw growth in gastrointestinal endoscopes in North America and Europe. It bought back ¥60 billion of its own shares while also pursuing an acquisition of a U.S. company. Its capital allocation differs from Terumo's ¥20.1 billion settlement gain, and the balance between growth investment and shareholder returns will be in focus.
• HOYA drew high profitability from Information and Communications, while its Life Care business also improved. It announced a ¥200 billion share buyback, larger than Olympus' ¥60 billion program, strengthening shareholder returns. High margins and cash generation underpin the payout.

Investors will want to look beyond the size of buybacks to how they balance with future capital spending and research and development. For job seekers, the companies apply their technologies in different markets: Terumo in medical devices, Olympus in endoscopes, and HOYA in optics and semiconductor-related fields.

• Currency reversal. Overseas sales are growing, but a shift to a stronger yen could reduce revenue and profit when translated into yen.
• Changes in tariffs and trade policy. A U.S. tariff refund boosted Terumo's profit. Future policy changes could affect procurement costs and selling prices.
• Shifts in demand and market conditions. Medical device demand matters across the group. For HOYA's Information and Communications business, changes in semiconductor and data-storage markets can also affect performance.
• Regulation and technology competition. Medical device makers must meet approval and safety requirements in each country. Delays in product development or competitors' technological advances could erode market share and margins.
• Reliance on one-off gains. Factors such as Terumo's settlement payment and tariff refunds may not recur. Investors should distinguish core operating profit from one-off items.

Terumo ranked first in sales and operating profit, while HOYA led in operating margin. Olympus had the fastest operating profit growth but ranked lower in both profit amount and margin. Growth rates alone do not fully capture each company's earnings power.

Net profit growth was 112.5% at Olympus, 68.3% at Terumo and 26.9% at HOYA. The three-company average was 69.2%, although one-off factors and differences in profit levels also played a part. High growth and high profitability are separate measures of competitiveness.

Medical device companies rely not only on product development but also on quality control, regulatory affairs, manufacturing and overseas sales. Terumo and Olympus offer opportunities to work on products close to clinical settings and customer needs, while HOYA spans both Life Care and Information and Communications.

When choosing an employer, look beyond sales growth to which businesses generate profit and where a company invests. Terumo stands out for its broad medical fields, Olympus for its strong endoscope business and efforts to turn around Surgical, and HOYA for its highly profitable businesses and ability to apply technology across markets.