Renesas: Q1 Auto Growth 11.9%, Industrial Soft

Renesas Electronics has reported its financial results for the first quarter of the fiscal year ending December 2024 (January to March). Net sales decreased by 2.2% year-over-year to 351.8 billion yen, while operating profit dropped to 113.5 billion yen. The operating profit margin fell by 2.4 percentage points to 32.3%. Although sales were lower compared to the same period last year, they surpassed expectations by 2.0%, mainly due to exchange rate impacts.

By business segment, Renesas' automotive division experienced an 11.9% year-over-year increase in sales, reaching 178.2 billion yen. Meanwhile, sales in the industrial, infrastructure, and IoT sectors declined by 13.3% to 171.6 billion yen. Sales in other areas amounted to 2.1 billion yen. Looking ahead to the second quarter, Renesas anticipates a 3.7% year-over-year decrease in sales to 355 billion yen. Nevertheless, sales in the automotive, industrial, infrastructure, and IoT segments are expected to grow. Operating profit margin is projected to decrease by 4.5 percentage points to 30.5% due to changes in product mix and higher manufacturing costs.

In a financial briefing, Hidetoshi Shibata, President and CEO of Renesas Electronics, remarked, "The first quarter of 2024 marks the low point for our earnings, and this forecast remains steady. Demand in the automotive sector is expected to rise throughout the year, albeit at a slower pace. Data center and infrastructure business is set to grow steadily, driven by AI demand. In contrast, short-term demand in the industrial and mobile sectors is likely to remain subdued as clients continue to clear their inventory."