No doubt the legion of Olympus bashers who are out there in cyberland will be commenting negatively on the latest financial results of the company as they cherry-pick numbers. This short article provides a couple of links that may be of interest.
Here is a link to the Olympus 3rd Quarter 2020 results presentation. Those of you interested in the Imaging Division will find information on Page 12. You can make your own assessment on the results as reported.
Here are some top line facts about the 3rd Quarter 2020 results…
- Camera revenues increased 6% in the third quarter, but are still down overall on a year-to-date basis.
- Mirrorless camera sales increased 14% in the third quarter, but are down 8% on a year-to-date basis.
- While the Imaging Division is still in a loss position, profitability increased by 2.2 billion Yen in the 3rd quarter.
- Overall the operating profit of Olympus Corporation reached a record high of 78.5 billion Yen for the first 9 months of the 2020 fiscal year.
- Overall revenue and operating profit forecasts were revised upward based on the 3rd Quarter 2020 results.
- Olympus stock price rose after the 3rd Quarter 2020 results were released. Click on the one month trend in the graphic on the right hand side of the web page that opens to see the stock price rise.
So, the Imaging Division is losing money, albeit at a reduced rate. Gross profit of the camera division has increased in the 3rd quarter. Company-wide Olympus is achieving record profitability and its stock price rose on the reported results for the 3rd Quarter of 2020.
I don’t see that the sky is falling. Olympus is making very good progress with its profitability. I don’t discern any reason to believe that the camera division is under any risk of closure, especially with a new OM-D E-M1 Mark III and some new lenses on the immediate horizon. Readers can make their own determination.
If you are interested, you may want to look at the recent financial reports from Nikon. It would appear that Nikon is now forecasting a loss for its imaging business for the current fiscal year. If you look at Page 15 of the Nikon presentation materials you’ll see that the loss from the imaging business is forecast to be 10 Billion Yen (it includes a one time charge)… this happens to be larger than the loss that Olympus is forecasting for its imaging business (9 Billion Yen).
Nikon’s camera business is far larger of course which means that Olympus has a bigger challenge ahead to make its imaging division profitable. Olympus has stated publicly that its Imaging Division is of strategic importance to its other operating divisions.
When comparing company consolidated forecasts it is also interesting to note that Olympus is forecasting 810 Billion Yen in revenue compared to 620 Billion Yen for Nikon. Consolidated operating profit for Olympus for 2020 is forecasted to be 92 Billion Yen (see page 17 of Olympus document), compared to 20 Billion Yen for Nikon (see page 21 of Nikon document). I find it interesting that Olympus is over 30% larger than Nikon in terms of overall revenues, and 4.6 times more profitable than Nikon.
What this comparison shows us is that in today’s declining camera market any company’s camera division faces challenges and could face an uncertain future.
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