Nikon Q1 financial results are out



Nikon published their first quarter financial results of the year ending on March 2018:

  • Operating profit of Q1 was ¥12.4 billion exceeding our forecast.
  • Revenue decreased ¥5.6 billion YoY due to FPD lithography sales volume decline and a change in product mix of new DSLRs.

Nikon also revised their financial forecast for the fiscal year ending March 31, 2018 - the company now expect higher revenue and profit:

  • Imaging Products Business: upgraded Revenue and Operating Profit by ¥5.0 billion and ¥3.0 billion respectively partly due to increase of sales volume in Q1

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  • Gordon Hamilton

    Not bad considering the lack of significant new products launched this fiscal year

    • Rich Murray

      The D500 is a dud?

      • Thom Hogan

        D500 was launched previous fiscal year.

        • yes, Nikon basically did not announce anything major in their last financial year that ended on March 31, 2017

          • silmasan

            Do you think they’re gonna release a D500S along the D5S (or sometimes after)?

            • no

            • Thom Hogan

              They should.

              This is one of the things I don’t get about Nikon. They have a hit, they don’t tend to keep it a hit (with a few exceptions). Given the changes they’ve just done in firmware with the D5 already, there’s plenty of room for improvement that could generate a D500s (or a big D500 firmware update).

      • Vince Vinnyp

        That was last year 7500 was this year.

        • Rich Murray

          JEEZ time flies! yup 1/2016 sure felt like later than that.

      • Gordon Hamilton

        The D500 is most definitely NOT a dud but it is from the previous fiscal year. The D7500, however, is a dud.

        • Coffee

          I think the D7500 was a promotional product to entice people to buy the D500. While it was a bit expensive, it seems to be working. Hopefully they can sell all these promotional products for at least break even.

        • DaveyJ

          I own the D7500, and for that matter have owned a lot of high end camera gear, including the D500. The D7500 is a really good camera!

        • Ben Brayev

          whys it a dud? its so much better than what canon has to offer with their weak 80D. it amazes me how negative people can be about anything.

          • Gordon Hamilton

            Because it is lacking in several areas compared to the D7200, namely 1) no metering with manual focus lenses, 2) No battery grip available, 3) only one SD card slot, 4) inferior quality construction and also it is overpriced by comparison

            • I’m pretty sure 95% of Nikon D7000 series cameras don’t use manual focus lenses and don’t need a battery grip or a second card slot. Also, the 4th point is quite questionable.

            • Ben Brayev

              comparing it to the d7200 is pointless because each has its strengths and weaknesses.. the d7500 is generally much better than the d7200, i own one and love it, but 6 fps is too slow for my use.. and honestly, it doesnt track birds so great, especially if the bird is moving further away, for some reason the camera just freezes until i press on the af-on button again.. anyway, if i didnt own a d7200 id get the d7500.

              but now im waiting for the d850/future d500s

            • Davidvictormeldrew Idontbeliev

              Wish Nikon added 2 memory slots mirroring the D500 and to get the punters to take up the ownership of the XQD media

              2nd wish was that the 4K Video would sample the entire crop of the Sensor in both D7500, D500 and D5.

              Apart from that the D7500 a great edition to the family

  • Eric Calabros

    This table would look so nicer if they release a M5 rival with a bunch of f2 primes

    • Davidvictormeldrew Idontbeliev

      and would be bit healthier if they a) announced and released a D400 yonks and developed it through to mark n ago b) Developed the RX10/100 series years ago and followed it through with mark n
      c) developed an AFS / FF Mirrorless range and not proceed with the Nikon 1 d) Nikon Cinema range like Canon e) ? Nikon camcorder range ? – could they produce a range that is exciting and steal any share of the market f) Improvement of customer service and reduction of QC issues over the years… g) road map in F Mount, Mirrorless published and keep punters informed all a) – g) have dented Nikon’s reputation and reduction of market share

      • Eric Calabros

        You are qualified to found a new imaging company

        • Davidvictormeldrew Idontbeliev

          i am very qualified in business and economics thanks

          • Davidvictormeldrew Idontbeliev

            personally I want Nikon be to successful as possible but to listen to their customers and to learn from their mistakes – that is the only way to survive and grow in a declining market where the punters do not have the same loyalty as before and will use / buy the tools that meet their expectations and without the hassle factor or issues

            • Proto

              and not use interns or outsource their servicing to save money while charging the customers the full rate

            • Davidvictormeldrew Idontbeliev

              Good reply Proto – probably doing this as well – outsourcing as much as necessary and possible to reduce costs ( short term ) – although if they don’t get this right and the customer service deteriorates or there are more QC issues – then this could be deter mental to Nikon, e.g., customer experience with Nikon not only in good times but in bad times.

            • Nikon lacks video expertise. Canon has been selling pro video cameras for decades. Sony has dominated sensors since the dawn of the digital era (and owns pro video even more than canon). I think we can all agree that Nikon 1 failed, but it was a failure of execution not strategy.

              Yes, it would be lovely for Nikon if it somehow innovated ahead of all its rivals, but that’s fantasy not economics. And look at Panasonic, which has executed pretty much across the board (excellent video, great lens range, critically acclaimed large sensor compacts) and still is doing poorly.

            • Davidvictormeldrew Idontbeliev

              Good reply – one of Nikon’s issue is late timing and is only an imaginery company, They could have made an impact of a DSLR / camcorder Cinema / semi pro line when they’re introduced the D90. Ditto with the lateness of the DL line (and subsequent cancellation) and the late of the pro DX camera – this was a close one driving quite a few people over to competitors, e.g., Canon 7D MK n, etc

            • I agree. Poor follow up on the D90’s innovative video capability and the Nikon 1’s on sensor PDAF are the biggest strategic missteps Nikon has made in the camera business in the last ten years.

              It’s possible the D90 was simply rushed to market, Nikon possibly knowing Canon had the same functionality in the works. If so, then perhaps Nikon never had a real chance in video.

              Also — Nikon 1 should have been the precursor to Nikon being strong in the 1″ sensor camera (ILC and compact) market, instead they failed miserably and Sony is cleaning up. 1″ sensors weren’t a strategic error, they were an execution fiasco.

            • Davidvictormeldrew Idontbeliev

              Agree 100%

      • Max

        You want them to make a D400 now?

        • Davidvictormeldrew Idontbeliev

          No – along with the DL mistake and not doing a RX10/100 this ship has sailed and had cause quite a bit of heartache for punters at the time and some of the DX shooters moved to other alternatives.

          I had the money twice for the DL camera one 3 years ago for the RX100 Mk 1 and one in April this year when I brought the RX100 MK 4.

          For the D400 personally I went to the D7nnn model/s and then upgraded to the excellent D500 when it came out.

          Must say that in the medium DX and upwards – Nikon certainly deliver but there have been missed chances to mop up / increase their market share.

    • Claude Mayonnaise

      I think the D850 is here to appeal to the current DSLR base and it will certainly do that. Nikon have to realize how important a viable mirrorless option is to their success as a company. I’m no Mirrorless rules the world dude but one has to be living in a cave to ignore its potential and current success for companies. If they screw it up like the last few mistakes such as the Nikon 1 and that 360 project then I’m going to say they are indeed up the creek in the long term.

  • Eric Calabros

    Sony imaging group’s net profit was 22 billion yen, if I remember correctly. Nikon with almost double market share and so much more efforts makes only 1/3 of that. Yes I know Sony imaging includes high margin broadcast/cine gears, but still

    • sandy

      I think I saw the camera div alone would be way less than Nikon

      • Eric Calabros

        Maybe I’m wrong but I remember I saw number 22 in their imaging slide

        • sandy

          I am talking raw camera sales only. I thought I saw half of Nikon. We need Thom, he would know.

          • Thom Hogan

            Sony claims to have sold 1.25m cameras in the quarter, Nikon 1.5m. How that breaks out for Sony is unknown, however.

            • sandy

              Thanks Thom, It’s good to have an expert around. Looking forward to your analysis.

            • Thom Hogan

              Already posted on my site this morning.

            • sandy

              Nice, good read.

            • Davidvictormeldrew Idontbeliev

              agree 2,,,

            • MB

              Always a pleasure reading Thoms translation of Nikon financial results :o)
              Seems to me the fact that DSLR value goes down and mirrorless up even much more than pure volume increase would suggest according to CIPA data should be pretty significant for Nikon …
              I wonder if Nikon still has any other viable business besides still cameras and yokan to support their restructuring plans..,

            • Thom Hogan

              Yes, that’s true. You can see it in CIPA’s own numbers, but when you combine that with the reporting by Canon, Nikon, and Sony, you get additional verification.

              But…some of that is just timing. Canon and Nikon have been on upgrades of their low-end DSLRs, Sony/Fujifilm/Olympus/Panasonic have been on pushing mirrorless offerings upwards. This is likely to flip in 2018.

            • Max

              It’d be interesting to see how many D3400’s they sold compared to D3300’s, compared to D3200’s etc.

            • I am not an expert but they revised their numbers up – this is a good news.

            • ZoetMB

              They revised the overall company numbers, but the Imaging group forecast remained exactly the same. In terms of both actual first quarter sales and in terms of their own forecast and Nikon’s call on what the full market size is, they are still losing share.

              Last fiscal, Nikon achieved a 26.4% share of DSLRs, 25.4% share of compacts and a 24.1% share of lenses as compared to CIPA shipments.

              For the first quarter of this year, they achieved a 23.7% share of DSLRs, 20.9% share of compacts and a 21.8% share of lenses.

              For the full fiscal year forecast, Nikon is projecting a 23.4% share of DSLRs, 22.1% share of compacts and a 20.6% share of lenses.

              So for DSLRs and lenses, they’re still losing share to competitors which means even with whatever they release this year, their competitors are doing a better job in terms of units than they are. Profits are another matter, although Nikon is projecting only a 7.8% margin, which is quite low.

            • Thom Hogan

              A 7.8% net profit margin is decent, not low. It is lower than their usual ~10%, and 10% is about where I’d expect very healthy companies to be long term.

            • Eric Calabros

              So Canon 2.4, Nikon 1.5, Sony 1.25
              Considering Sony P&S camera sales are much lower than Canikon, we can assume Sony is already achieved #2 position. But forgot celebrate that?

            • I think they include also video cams in that number and so does Canon.

            • Eric Calabros

              Video cams make huge profit, but they’re very low volume. I think Sony is #2 in unit sales of ILC

            • Max

              Just curious, do you see lots of Sony’s out in the wild in the US?
              Here there’s none, but Sony camera did close in South Africa two years ago.

            • Eric Calabros

              Apparently they are selling a lot in Asia, mostly China.

            • Thom Hogan

              Can’t speak specifically for Sony as they’ve not disclosed exactly what they mean. But Canon issues specific numbers for ILC and compact still cameras.

            • sandy

              Not seeing the #2 for Sony. Please show numbers.

            • Thom Hogan

              No.

            • Adam Brown

              No… Sony isn’t #2… but they are closer than they have ever been.
              They are likely between 14-18% ballpark… Nikon is 20-25%.
              If Nikon fails to right the ship, Sony could surpass them within 1-2 years.

            • Thom Hogan

              Nikon is currently at 25% in ILC. They expect to drop to 24% by March 2018.

              Sony is tougher to gauge, as they mix and match publicly stated numbers in ways that make it difficult to assess. But at the moment based on non-public info I have access to, I don’t think they’ve managed to build beyond 14-15%. They lost mirrorless market share to Canon in the last two quarters.

              If we take the trailing year numbers and run the stated market shares through it, that leaves about 1.6m annual units for Fujifilm, Olympus, Panasonic, and Pentax combined.

            • Adam Brown

              So they are already within 10 points…
              If Nikon does a bit worse than their expectations… they could easily fall to 21-23%…
              As Sony a9 tech filters down to cheaper products… not hard to imagine them climbing to 17-18%…
              Putting them within striking distance in a year or 2.

              As you’ve suggested before… Nikon is ok with their high end products but haven’t figured out much else right now.
              I’d suggest that their video limitations, live view limitations, etc… will start to become a disadvantage even in the high end market. (If I was a wedding photographer just starting out… with the anticipation I might do some video… I’d have to pick Canon or Sony over Nikon right now).

            • Adam Brown

              Thom…
              This appeared in an imaging-resource article today:

              *In terms of being a true leader in the market, we were shown market data indicating that Sony now is in fact solidly in the #2 spot for interchangeable-lens camera sales both globally and in several major markets, including the US — and not just for a single month, here or there. We were only allowed to share some very limited quotes from the market-research firm producing the numbers (because the other companies Sony is competing against are the research firm’s customers as well), but the trends and monthly sales volume numbers were very clear. I’m comfortable saying that Sony is now the #2 company in the interchangeable-lens camera business, based on the overall dollar (or Yen?) value of their sales.”

            • Thom Hogan

              By value? Possible, but still slightly improbable. Sony would likely have to have an average selling price of nearly 2x Nikon for that to be true.

              There’s also the problem that whatever that data is doesn’t seem to agree with, for instance, CIPA data correlated with the Canon/Nikon reported data for the previous quarters. Canikon reported 70.5% of the market share between them. Average sale price for DSLR versus mirrorless didn’t really deviate until May/June, particularly June.

              While I admire David Etchells and trust what he reports, I wonder how hard he actually challenged those Sony assertions and materials. They were made by a company that wanted to put themselves in the best possible light, after all.

              That said, Nikon certainly has their work cut out for themselves. Realistically, the D500 and D810 are the cameras still driving their retail sales here in the US, with the D7200/D7500 and D750 somewhat behind. The D3xxx/D5xxx sales have collapsed as far as I can tell (which is another reason why I don’t by the value differential Sony is claiming, at least if the Nikon reported numbers are accurate).

            • Yes, that data is coming directly from Sony, not from a third party. And we all know how good Sony marketing is… https://photorumors.com/2017/08/10/sony-self-claims-world-wide-2-spot-for-interchangeable-lens-cameras-still-committed-to-aps-c/

            • Adam Brown

              I have no inside information, just reading whatever credible sources I find (including reading your stuff).
              I would not be shocked if Sony really moved into #2….
              Partially because I can’t see where Nikon would be getting any current volume.
              The D810, at nearly $3,000 and 4 years old… I can’t see it being a volume leader.
              D500 may be selling, but at over a year old… it’s biggest sales point is past.
              Is the D7500 a big seller? I have no idea..
              The D5 isn’t a volume leader..

              The only personal evidence I have is anecdotal…. When I travelled 5 years ago, I primarily saw Canons and Nikons in tourist hands. Nowadays, I 90% see smart phones.. but the other 10% of the times…. It *feels* like I’m actually seeing more Sony a huge portion of the time. In many hands, I’m seeing A6000’s, and among apparent enthusiasts, I’m seeing A7 series cameras… with increasing frequency.

            • Sony includes video cams in that number too, right?

            • Thom Hogan

              I don’t think so. That number was described to me as still cameras, both compact and ILC.

      • Semaphore

        Yeah, a third of their Imagine revenue was from the likes of projectors and medical equipment. I don’t think those would be less profitable than the cameras.

    • Semaphore

      Sony Imaging Products & Solutions includes way more than still cameras. They reported 155 billion in revenues for Q1, much higher than Nikon’s imaging group.

      So that’s bit of an apples to oranges comparison.

      • Eric Calabros

        Senors are in Sony Semiconductor

        • Semaphore

          I mistyped. Edited before your reply though.

          Regardless of their product mix, the point remains, you can’t compare Nikon’s “double market share” in cameras to Sony’s much more diverse, and numerically bigger, business.

        • sickheadache

          Didn’t Sony Split their businesses?

      • Thom Hogan

        No.

        Sony IPS includes cameras, both still and video as well as projectors and broadcast equipment. Sony Semiconductor includes sensors, and is a bigger business than IPS.

    • Mahatma

      Why is that a bad thing for us consumers?Maybe it shows Nikon sells their gear for less profit which means cheaper prices for us consumers.Maybe I’m wrong.

      • Thom Hogan

        Given Nikon’s historical position as a high-price provider, any erosion of pricing/profit by their camera division would indicate a weakness in their product line vis-a-vis the competition. Market share has already eroded from the historic ~33% levels to about 25%, another sign of weakness.

        • Mahatma

          Just seems like people grumbling for grumbling sake.Quality cost.Pure and simple.

          • Davidvictormeldrew Idontbeliev

            good call but people can vote with their feet and wallet and a) hold onto their gear even longer b) buy a competitor product c) buy grey imports d) buy second hand, etc, etc,etc,etc

    • TwoMetreBill

      More importantly the Sony group includes their non-camera sensor business: phones, cars and IOT. Delete everything we think of as camera related and their profits increase.

      Another way to say the same thing, in their imaging division, the only profitable segment is the non-camera sensors.

      Since Nikon depends on Sony for sensors and Sony loses money on camera sensors, well, you can guess where this is going. If the tends continue, Canon will eventually be the only manufacturer of camera sensors. Perhaps one in the D6?

      • Thom Hogan

        Please stop repeating this, it is wrong.

        Sony IPS does not include sensors. It does include broadcast TV gear, video cameras, and some other things that are not still cameras, but sensors are produced by Sony Semiconductor, a separate company whose numbers are reported on their own.

        Also: Sony does not lose money on sensors. The current quarter produced 204b yen in sales with 55b yen in profit for the semiconductor group.

  • Vince Vinnyp

    These are pretty good in the circumstances. Shares jumped nearly 3% that is not bad in a day for a 100 year old company. Zacks have it as a strong buy and in the top 5 for shares under 20$ i have no idea how they would be doing if they were not doomed 🙂

    • Thom Hogan

      Well, the broader picture is not a great one. The reason why the quants still like Nikon has to do with something that is now impacting users. Let me explain.

      Sales from FY2013 to FY2017 went 12.2b, 9.8b, 7.8b, 7b, 6.9b. That’s a pretty substantive decline, a negative growth company. But income as a percent of sales went 34.3%, 35.7%, 37.9%, 36.8%, 39.5%. In other words, as sales declined, profit went up. Earnings per share started at 1.12y for this period and ended at 1.02y, and EBITDA went 1.1b, 1.1b, 751m, 680m, 855m.

      Overall, Nikon has managed to their banks demands, and it shows. The dividend is still pretty much intact (and higher than interest rates in Japan), and the other fundamental numbers have been controlled while the company shrinks.

      I’ve long pointed out that Nikon is cost cutting at the expense of customers, though. That’s where a lot of that income increase came from. But at what point do the customers just balk at buying more as you squeeze things like customer service, etc.? At this point we should have had a functional D500 firmware update, too, but we didn’t get that, either. Why? Cost cutting. No DLs. Anticipated costs out of balance with their goals as they shrink.

  • sickheadache

    We Is Rich

  • Charles

    I’m asking because I don’t know… Could Nikon still be riding the success of the D500 in this report??

  • TwoMetreBill

    Someone must have a time machine, 2018 is still a year away.

    • Coffee

      Well current fiscal year is 2017-18, meaning the year end for Nikon is March 2018, so they are working on 2018 reporting figures.

    • Max

      It’s the first quarter of the 2018 financial year.

  • fanboy fagz

    let me guess, more management restructuring?

    • Thom Hogan

      No.

      • XXTwnz

        Too bad.

  • anim8tr

    Don’t want to rain on the parade here, but peple need to look at this a little more closely. The above erroneously states “Nikon published their first quarter financial results of the year ending on March 2018”. We have not reached March 2018 quite yet so those numbers are projected, NOT actual.

    • sandy

      That’s nothing erroneous about that, it is the end of the first quarter of the 2018 fiscal year. They give guidance (projections) on what they think the rest of the year may do and compare it to last year. They do this every year. Like most publicly traded companies.

      • anim8tr

        Got it, not quite as use to seeing the 1st QTR of the new year starting 9 months ahead of time. I stand corrected.

  • Gene

    OK. I’ll bite… Are these predictions for 2018, or 2017 results? Last time I checked, March 31, 2018 has not happened yet…

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