Earnings Forecast

January 31, 2024 (¥B)
  FY22 FY23   Change vs. Prior Full-Year Forecast
  Results 1Q Results 2Q Results 3Q Results 4Q Forecast Full-Year Forecast vs. FY22   FY23 Forecast as of Oct. Change
Change (%)
Sales(*1) 560.2 101.3 116.2 133.2 129.3 480.0 -80.2 -14.3%   470.0 +10.0
Operating Income 167.7 14.3 21.0 26.8 22.9 85.0 -82.7 -49.3%   80.0 +5.0
Operating Margin % 29.9% 14.1% 18.1% 20.1% 17.7% 17.7% -12.2pts     17.0% +0.7pts
Income Before Tax 171.3 13.0 20.3 26.3 22.9 82.5 -88.8 -51.8%   78.5 +4.0
Net Income 130.4 9.2 16.7 21.2 17.4 64.5 -65.9 -50.5%   60.0 +4.5
Net Income Margin % 23.3% 9.1% 14.4% 15.9% 13.4% 13.4% -9.9pts     12.8% +0.6pts
 
R&D Expenses 60.1 14.9 16.5 16.7 15.9 64.0 +3.9 +6.5%   64.0
CapEx 25.0 5.6 4.5 4.4 6.5 21.0 -4.0 -16.0%   21.0
D&A 21.4 6.0 6.5 6.6 6.9 26.0 +4.6 +21.5%   26.0
 
Exchange Rate(*2) 1 US$ ¥134 ¥135 ¥142 ¥149 ¥145 ¥143 ¥9 Depreciation   ¥142 ¥1 Depreciation
1 Euro ¥140 ¥146 ¥156 ¥159 ¥155 ¥154 ¥14 Depreciation   ¥153 ¥1 Depreciation

(*1): Intersegment transactions have been eliminated from totals
(*2): Our latest forecast for the impact of exchange rate fluctuations on FY23 operating income is plus ¥0.8 billion per 1 yen of JPY depreciation vs USD, and minus ¥0.3 billion per 1 yen of JPY depreciation vs Euro

Looking at Advantest's market environment going forward, Advantest anticipates that in the mid/long-term, semiconductors will need to have even better functionality and reliability as they rise to the challenge of providing infrastructural support for the worldwide digital transformation and green transformation. Our expectations of mid/long-term growth remain unchanged. Indeed, the emergence of new AI-based applications has accelerated the digital transformation, while growing demand for Net Zero initiatives has increased the importance of semiconductor technology for better energy efficiency. Customers are also aggressively continuing to develop next-generation devices, including advances in miniaturization. Advantest expects demand for semiconductor test equipment, which ensures that semiconductors support our "safe, secure, and comfortable" environment and society, to grow in step with the growth of the semiconductor market.

In CY2024, production adjustment by semiconductor manufacturers is likely to get resolved gradually, while investment related to generative AI is expected to become active. As a result, the semiconductor market is expected to pick up in the second half of CY2024. Therefore, Advantest's business environment is also expected to improve gradually. Meanwhile, a bird's-eye view of the global economy shows that concerns about recession in the U.S. and elsewhere have not been dispelled. In addition, the situation remains highly uncertain in the short term due to factors such as the expansion of geopolitical risks and the risk of sharp exchange rate fluctuations.

Based on this outlook and the progress made for the nine-month period ended December 31, 2023, Advantest revises its full-year consolidated forecast for the current fiscal year from the forecast as of October 2023 as follows. Sales forecast is revised up to (Y) 480.0 billion from (Y) 470.0 billion, operating income to (Y) 85.0 billion from (Y) 80.0 billion, income before income taxes from (Y) 78.5 billion to (Y) 82.5 billion, net income from (Y) 60.0 billion to (Y) 64.5 billion, respectively. This forecast is based on exchange rate assumptions of 1 USD to 145 JPY and 1 EUR to 155 JPY for the fourth quarter of the current consolidated fiscal year. Regarding the tightening of restrictions on the export of semiconductor production equipment to China by the U.S. and its allies, the direct impact on our current fiscal year's earnings is expected to be limited, but Advantest will continue to closely monitor the situation.

As mentioned above, our business environment remains uncertain, not least due to uncertainty in the global economy. Advantest will pay close attention to changes in the external environment and focus on efforts including the advancement of supply chain management.