SCREEN公布FY2027一季度利润同比大降41%，但上调全年指引和股息

U.S. chip stocks extend losses on AI financing, China competition fears
Introduction & Market Context
SCREEN Holdings Co., Ltd. presented its first quarter fiscal 2027 results on July 28, 2026, revealing a sharp profit decline that sent shares tumbling 10.82% despite the Japanese semiconductor equipment maker raising its full-year outlook. The presentation highlighted the company’s strategy to navigate near-term weakness while positioning for strong growth driven by AI-related semiconductor investment.
The company reported net sales of ¥121.7 billion for the quarter ended June 30, 2026, down 10.3% year-over-year, while operating income fell 41.1% to ¥14.3 billion. However, management emphasized that the company continues to receive record-high orders and raised its full-year forecasts across key metrics, including an increased annual dividend to ¥183 per share from the ¥175 May forecast.
Quarterly Performance Highlights
The first quarter results showed mixed performance across SCREEN’s business segments. As illustrated in the following consolidated earnings summary, the company’s operating margin compressed to 11.8%, down 6.2 percentage points from the prior year.
The Semiconductor Production Equipment (SPE) segment, which accounts for 76.5% of total sales, experienced the steepest decline. SPE sales fell 15.0% quarter-over-quarter to ¥93.1 billion, with operating income dropping 44.0% to ¥14.3 billion. Management attributed this to decreased sales for foundry and logic applications, particularly in China and Taiwan, along with a delayed project expected to be posted in the second quarter.
In contrast, the Graphic Arts (GA) and Flat Panel Display Manufacturing Equipment (FT) segments demonstrated resilience. GA sales grew 7.1% to ¥13.8 billion with operating income surging 150.7% to ¥1.4 billion, driven by increased recurring business. FT sales rose 8.0% to ¥10.8 billion with operating income up 54.4% to ¥1.2 billion, primarily due to increased OLED and LCD equipment sales.
The detailed segment breakdown below shows the varying performance across SCREEN’s business units.
Detailed Financial Analysis
The waterfall analysis of operating income changes provides insight into the primary drivers behind the quarter’s profit decline. Sales and capacity utilization decreased by ¥10.0 billion, mainly attributable to SPE, while fixed costs increased by ¥3.5 billion due to growth investments including R&D expenses, personnel costs, and depreciation.
Profitability improved by ¥2.5 billion, mainly from the FT segment, while exchange rates contributed a positive ¥1.0 billion impact, primarily benefiting GA. The net result was a decline in operating income from ¥24.3 billion in Q1 FY2026 to ¥14.3 billion in Q1 FY2027.
The company’s balance sheet remained robust with net assets reaching ¥497.3 billion and an equity ratio of 64.6%. Operating cash flow landed at ¥9.0 billion, mainly impacted by income taxes paid, while free cash flow was slightly negative at -¥0.9 billion after significant capital investments.
Strategic Initiatives
SCREEN is executing an aggressive investment strategy to capture anticipated market expansion in semiconductor equipment. First quarter capital expenditures surged to ¥17.8 billion, with the full-year forecast raised to ¥43.0 billion. This includes substantial investments in ATCA, a new R&D hub in Albany, New York, designed to establish a process evaluation scheme for advanced semiconductor manufacturing.
R&D expenses increased to ¥10.1 billion in the quarter, with the company forecasting ¥43.0 billion for the full year, primarily focused on the SPE segment. Management emphasized that these investments support efforts to expand market share through both product competitiveness and production capacity.
The company announced several strategic partnerships during the quarter, including joining Applied Materials’ EPIC Center as an Innovation Partner and IBM’s Sub-1 nm Chip Ecosystem. These collaborations aim to accelerate technology development for advanced chips and expand joint development opportunities.
In the Graphic Arts segment, SCREEN partnered with Chiyoda Gravure Corporation to promote digital printing of flexible packaging, targeting high-mix, low-volume production while reducing environmental impact. The companies aim to achieve a flexible packaging ratio of approximately 10% by 2030.
Forward-Looking Statements
Despite the weak first quarter, SCREEN raised its full-year fiscal 2027 forecasts based on near-complete order visibility. The updated guidance reflects management’s confidence in the semiconductor equipment market’s trajectory.
The company now expects net sales of ¥743.0 billion, up from the ¥725.0 billion May forecast, with operating income of ¥156.5 billion (versus ¥150.0 billion previously) and an operating margin of 21.1%. Net income guidance was raised to ¥115.0 billion from ¥110.0 billion.
The forecast improvement is primarily driven by the SPE segment, where sales are now projected at ¥620.0 billion with operating income of ¥159.0 billion and a margin of 25.6%. The following waterfall chart illustrates the expected drivers of full-year operating income growth.
Sales and capacity utilization are expected to contribute ¥74.5 billion to operating income growth, mainly from SPE, while fixed costs will increase by ¥31.5 billion due to continued growth investments. Profitability is expected to decline by ¥8.5 billion, also mainly influenced by SPE segment dynamics.
Market Outlook and Segment Forecasts
SCREEN’s presentation outlined a robust market environment for semiconductor equipment. The Wafer Fab Equipment (WFE) market is expected to grow approximately 20% to around $140 billion in calendar year 2026, with similar growth projected for 2027. AI-driven leading-edge investments in foundry applications are identified as the primary growth driver.
The company’s SPE equipment sales forecast by application shows significant growth expected across multiple segments, particularly in foundry and NAND applications during the second half of the fiscal year.
For the full fiscal year 2027, SPE equipment sales are forecasted at ¥508.6 billion, with foundry accounting for 52%, logic 25%, NAND 9%, DRAM 1%, and imaging devices 4%. The second half is expected to see substantial increases in foundry and NAND sales.
Geographically, SCREEN’s sales forecast demonstrates continued diversification across key semiconductor manufacturing regions.
China is expected to remain the largest single destination at 37% of SPE sales for the full fiscal year, followed by Taiwan at 25% and Korea at 15%. Management noted that Chinese investments are becoming active not only among existing foundry and memory clients but also among emerging and foreign-affiliated customers.
Post-sales revenue, which includes consumables, maintenance, and replacement parts, is projected to exceed ¥100 billion for the first time in fiscal 2027. This recurring revenue stream is becoming an increasingly important component of SCREEN’s business model, driven by higher fab utilization rates creating demand for replacement of consumable parts and units.
The Graphic Arts segment is expected to achieve sales of ¥60.0 billion with an operating margin of 9.2%, while maintaining a focus on recurring business which accounts for approximately 50% of segment revenue.
The FT segment forecast calls for sales of ¥43.0 billion with a 5.8% operating margin, driven by OLED equipment sales accounting for 50% of the segment total and LCD at 15%. The segment is also integrating the advanced packaging business to generate synergies across engineering, manufacturing, and sales.
Long-Term Performance Trends
The company’s long-term KPI trends demonstrate sustained growth and profitability improvements over the past decade.
From fiscal 2017 through the fiscal 2027 forecast, SCREEN has grown net sales from ¥300.2 billion to an expected ¥743.0 billion, while operating income expanded from ¥35.7 billion to a forecasted ¥156.5 billion. Return on equity has improved to an expected 20%+ range, while the company has maintained a strong balance sheet with net equity ratios consistently above 60%.
The historical segment performance chart illustrates how SPE has become the dominant growth driver while other segments have maintained relatively stable contributions.
SPE’s operating margin has expanded from the mid-teens percentage range in fiscal 2017 to a forecasted 25.6% in fiscal 2027, reflecting both scale advantages and the company’s focus on higher-value advanced equipment. The GA segment has shown steady margin improvement to a forecasted 9.2%, while FT margins have been more volatile, reflecting the cyclical nature of display equipment investment.
SCREEN’s increased annual dividend to ¥183 per share represents continued commitment to shareholder returns, with the company targeting a consolidated dividend payout ratio of 30% or above under its "Value Up Further 2026" initiative. The stock split that became effective on April 1, 2026, was designed to improve share liquidity.
The presentation concluded with an emphasis on SCREEN’s strategic positioning to capture the semiconductor industry’s growth driven by AI, advanced packaging, and memory expansion, while managing near-term capacity constraints through significant capital investments in R&D and manufacturing facilities.
Full presentation:
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