Presentation Transcripts

For the Machined Components business segment, first quarter net sales were 30.0 billion yen, up 7.0% from the previous quarter. Operating income was 7.5 billion yen, up 14.1% from the previous quarter. Operating margin was 24.9%, up 1.5 percentage points from the previous quarter.

Looking at specific products, first quarter sales of pivot assemblies for Hard Disk Drives (HDDs) increased by 8.8% from the previous quarter because our higher market share was maintained after a competitor's Thai production capacity was hit hard by the floods, and our shipment volume reached a record high during April and May even though there was a sudden inventory adjustment in the HDD market during June. Profits were significantly higher compared to the previous quarter due to improved capacity utilization. Regarding the HDD market, there were production adjustments by HDD manufacturers in and after June, we expect that the market will be flat in the September quarter. However, it is expected that it will return to a recovery trend in the December quarter.

First quarter sales of ball bearings increased by 6.8% from the previous quarter to 15.6 billion yen due to a steady increase in external shipments mainly for fan motors and automobiles as the global economy recovered.

First quarter sales of rod-end bearings and fasteners increased 5.6% from the previous quarter to 5.7 billion yen due to continued increases in demand for aircraft. From now on, we will focus on profitability by strengthening marketing capability and reducing production costs through an expansion of the production capacity in Thailand as the commercial aircraft market is expected to expand steadily for the medium term.