Presentation Transcripts

Third quarter net sales for the Machined Components business segment were up 1% year on year and down 4% quarter on quarter to total 40.8 billion yen. Operating income hit a record high to reach 10.6 billion yen which was up 5% from the same period last year and up 4% from the previous quarter. We believe the Machined Components business is about to establish the firm structure to steadily and constantly achieve 40 billion yen or more operating income in a twelve-month period. The operating margin was up 1.8 percentage points at 26.0%. Although the onetime loss at our U.S. subsidiary in the previous quarter was not completely dismissed, steady growth in ball bearings more than offset the negative factors.
While sales amount of ball bearings were down 3% quarter on quarter to total 24.0 billion yen due mainly to the foreign exchange rate shifting to appreciation of the yen, profit grew from the previous quarter. Growth in demand for ball bearings remains strong, driven by many different applications such as automobiles, pushing the average monthly external shipment volumes up to 156 million units in December quarter to a new quarterly record high.
Sales of rod-ends and fasteners were down 3% quarter on quarter to 7.8 billion yen. Although sales decreased because of the Christmas holidays in U.S.A. and Europe, profit grew from the previous quarter. Steady growth is expected in this area thanks to increasing production of commercial aircraft worldwide.
Sales of HDD pivot assemblies decreased 6% quarter on quarter to 8.9 billion yen due to HDD market recovery peaking out. Profit from pivot assemblies grew slightly from the previous quarter. Although sales volume of pivot assemblies is declining due to reduced HDD demand, we have maintained profit by capturing demand for orders of high-end products.