Murata Expects 30% Net Income Growth for FY 2024

Japanese MLCC manufacturer Murata Manufacturing Co., Ltd. has released its financial results for the fourth quarter of fiscal year 2023 and full fiscal year 2023 on April 26, following the close of the Japanese stock market.

The report indicates that, despite increased demand from smartphones and automotive applications in fiscal year 2023 (April 2023 - March 2024), a decrease in demand for PCs and industrial products resulted in a 2.8% decline in consolidated revenue to 1,640.2 billion yen. Due to decreased capacity utilization and product price declines, along with a 49.5 billion yen impairment loss in its cylindrical lithium-ion battery business, consolidated operating income decreased by 27.8% to 215.4 billion yen, and consolidated net income fell by 25.9% to 180.8 billion yen.

Looking at the fourth quarter of fiscal year 2023 (January - March 2024), consolidated revenue increased by 12.3% year-on-year to 390.4 billion yen. However, consolidated operating income plummeted by 98.4% to 300 million yen, and consolidated net income fell by 79.7% to 6.3 billion yen.

Murata noted that demand for electronic components in smartphones and automotive electrification drove an overall order intake of 410.5 billion yen in the first quarter, a 30.8% increase year-on-year. The company's book-to-bill ratio reached 1.05 in the first quarter, the first time it has surpassed 1 in eight quarters, indicating an improvement in orders.

Murata projects that global smartphone demand will rise by 3% year-on-year to 1.18 billion units in 2024, with 5G smartphones expected to grow by 17% to 770 million units. PC demand is projected to increase by 2% to 370 million units, while automotive demand is expected to remain stable at 90 million units, with demand for electric vehicles (xEVs) growing by 20% to 36 million units.

During an online press conference on April 26, Murata President Tsuneo Murata stated that the component shipments for the Chinese smartphone market have shown signs of recovery, with increased demand from both entry-level and certain high-end models. He also noted that the factory utilization rate for MLCCs is expected to rise to 85-90% this fiscal year, up from 80-85% last year.

Based on these trends, Murata forecasts consolidated revenue for fiscal year 2024 (April 2024 - March 2025) to increase by 3.6% year-on-year to 1.7 trillion yen, with operating income growing by 39.2% to 300 billion yen and net income increasing by 30.0% to 235 billion yen, marking the first growth in nearly three years.

In terms of business segment performance, Murata anticipates that revenue in the components segment (including capacitors and inductors/EMI filters) will increase by 8.5% year-on-year to 1,013.1 billion yen. Capacitor revenue (primarily from MLCCs) is expected to rise by 8.7% to 818.9 billion yen, while inductor/EMI filter revenue is projected to grow by 7.7% to 194.2 billion yen.

In the devices/modules segment (including high-frequency/communication modules, energy/power components, and functional devices), revenue is expected to decrease by 3.1% year-on-year to 673.8 billion yen. High-frequency/communication module revenue (including high-frequency modules, surface acoustic wave filters, connectors, and resin multilayer substrates "MetroCirc") is expected to decrease by 1.9% to 431.6 billion yen. Energy/power components (including lithium-ion batteries and power modules) revenue is projected to decrease by 12.3% to 144.2 billion yen, while functional devices (including sensors) revenue is expected to increase by 8.1% to 98 billion yen.