Renesas Electronics reported a marked improvement in first-quarter results, with profit attributable to owners more than doubling from a year earlier as demand held up across its automotive and industrial businesses.
For the quarter ended March 31, profit attributable to owners rose to 68.1 billion yen, up from 26.0 billion yen in the prior-year period. Revenue for the period came in at 380.3 billion yen, an increase of 23.2% year-on-year. Operating profit expanded sharply to 90.6 billion yen from 21.5 billion yen a year earlier.
Business drivers
Growth was described as broad-based. The automotive segment benefited from steady demand for microcontrollers and power semiconductors. Meanwhile the industrial, infrastructure and IoT segment recorded especially strong gains, rising 32% on the back of increased infrastructure-related demand.
Market reaction and trading
Even with the strong set of results, Renesas shares declined in Tokyo trade as investors booked profits after a run-up in the stock. The company experienced six straight days of sharp gains prior to the sell-off. By 01:08 GMT, Renesas shares were trading 7.3% lower at 3,058.0 yen.
Outlook
Renesas provided a first-half non-GAAP revenue forecast in a range of 752.8 billion yen to 767.8 billion yen, a projection that implies continued growth into the first half. The company also indicated expectations for margins around historical strengths, with gross margin seen at approximately 58.1% and operating margin at about 31.3%.
Takeaway
The quarterly results underline a recovery in demand across automotive and infrastructure-related industrial markets for the chipmaker, reflected in significant jumps in revenue and operating profit. However, the share-price pullback illustrates how rapid prior gains can prompt short-term profit-taking among investors, producing volatility even after an earnings beat.