Kawasaki Heavy Industries (7012) Q3 2026 earnings summary

Executive summary

• Third quarter FY2025 revenue reached ¥1,561.4 billion, up ¥154.0 billion year-on-year, with record highs in orders, revenue, and profit for the period; profit attributable to owners of parent rose to ¥65.8 billion, up ¥21.6 billion year-on-year.

• Business profit rose to ¥82.4 billion, driven by strong Aerospace Systems and Energy Solution & Marine Engineering segments, offsetting weakness in Powersports & Engine, which was impacted by U.S. tariffs and competition.

• Full-year business profit forecast remains at a record ¥145.0 billion, with profit attributable to owners of parent revised upward to ¥90.0 billion due to foreign exchange gains.

• Comprehensive income increased 73.0% year-on-year to ¥91,836 million.

• Results are generally in line with previous guidance, with a stronger yen and significant U.S. dollar-based transactions.

Financial highlights

• Profit before tax increased to ¥88.8 billion, up ¥24.4 billion year-on-year, with a margin of 5.7%.

• Net debt-to-equity ratio improved to 90.5% from the same period last year; net D/E ratio at end of Q3 FY2025 was 109.6%.

• Gross profit improved by ¥7.1 billion, while SG&A expenses increased in line with revenue but the SG&A ratio declined.

• Basic earnings per share rose to ¥393.97 from ¥263.64 year-over-year.

• Finance income benefited from significant foreign exchange gains.

Outlook and guidance

• Full-year forecasts for revenue and business profit remain unchanged at ¥2,340,000 million and ¥145.0 billion, respectively.

• Profit attributable to owners of parent is projected at ¥90,000 million, with basic EPS of ¥538.43.

• Orders received forecast revised upward by ¥90 billion to ¥2.62 trillion, reflecting strong demand for domestic waste incineration plants.

• Dividend forecast revised upward to ¥166.0 per share for the year ending March 31, 2026.

• Aerospace Systems and ES & M forecasts revised upward due to improved profitability, while PS & E was revised downward due to U.S. market challenges.