Investing.com -- Renesas Electronics (TYO:6723) shares fell on Thursday as investors weighed expectations for lower profitability in the fourth quarter, overshadowing strong demand for automotive semiconductors and data-centre products that lifted revenue.
The stock dropped 6.4% to ¥2,903, underperforming Japan's broader Nikkei 225, which rose around 0.6% in early trading.
Profit attributable under IFRS rose to ¥372.2 billion in the July-September quarter from ¥106.3 billion a year earlier. However, the reported figure included a gain of about ¥450.3 billion from the transfer of the Timing business, completed in July.
On a non-GAAP basis, which adjusts for non-recurring items, profit attributable increased to ¥125 billion from ¥88.2 billion, while operating profit climbed 46% to ¥150.5 billion. These measures indicate improved underlying profitability alongside the impact of the disposal.
Revenue increased 30% year on year to ¥435.9 billion under IFRS, while non-GAAP revenue rose 30.2% to ¥435.2 billion. The latter exceeded the midpoint of the company's own quarterly forecast by 1.2%. Gross margin on a non-GAAP basis improved to 59.4% from 57.6%, helped by yen depreciation, improved product mix and lower manufacturing costs.
However, the fourth-quarter forecast points to sequential margin pressure. Renesas expects non-GAAP revenue of ¥454 billion, with a range of ¥7.5 billion above or below that midpoint, while forecasting a gross margin of 58% and an operating margin of 32%. The latter compares with 34.6% in the third quarter.
The outlook comes as Renesas ramps up investment to meet rising demand. The company's Industrial, Infrastructure and IoT business generated non-GAAP revenue of ¥243.8 billion, up 46.4% year on year, driven by data-centre demand and a recovery in industrial and IoT markets.
Automotive revenue rose 19.3% to ¥189.5 billion, supported by stronger demand and a recovery from previous distribution-channel inventory adjustments.
Renesas' full-year non-GAAP revenue forecast stands at ¥1.66 trillion to ¥1.67 trillion, implying growth of 25.8% to 27% year on year.
Original Article
Renesas slides over 6% as fourth-quarter margin outlook overshadows profit growth
KION Q3 adjusted EBIT misses forecast as weak truck orders prompt guidance cut
Prysmian raises 2026 outlook again after record Q3 EBITDA beats estimates
