20 Feb 2012
Firm blames sluggish demand and the growing value of the Japanese yen as sales and profits both decline.
Operating profit at Hamamatsu Photonics has fallen by 14% year-on-year, despite growing demand for the Japanese company’s photomultiplier tubes (PMTs) from oil firms in the US.
For the three months that ended December 31, it posted sales of ¥23.7 billion (approximately $298 million), down only 4% on the equivalent period one year earlier. But with an increase in selling, general and administrative expenses, Hamamatsu’s operating profit fell to ¥4.3 billion.
In a statement accompanying the results, the company reported: “The economic recovery of the first quarter of this fiscal year appeared to be pausing under the influence of the global slowdown and the yen [currency] appreciation, resulting from the debt crisis in the European Union.”
Hamamatsu’s two largest business units are its “electron tube” and “opto-semiconductor” divisions, each posting sales of just over ¥10 billion in the latest quarter. But while increased use of its PMTs in oil-well logging applications helped to boost sales, demand from the medical sector, where the sensitive detectors are used in diagnostic imaging systems, was said to be “sluggish”.
Sales of silicon photodiodes were down both domestically and overseas, with reduced demand from industrial instruments and semiconductor inspection systems, as the microelectronics market continued its “down” cycle. And while these photodiodes are finding increasing use in baggage inspection systems, overall segment sales were down 4.5% year-on-year at ¥10.1 billion.
Semiconductor cycle impacts sales
The impact of the semiconductor industry cycle on Hamamatsu’s “imaging and measurement instruments” division was even more evident, with sales falling 27.4% year-on-year to ¥2.3 billion. “Sales of digital cameras for academic research in the field of biomedical science were down in the US and semiconductor failure analysis systems sales in the industrial market decreased mainly in Asia and Europe,” the company stated.
In response to the weak economic environment that it perceives, Hamamatsu says that it has tried to intensify its sales activity and develop more competitive products while simultaneously reducing its operating expenses.
But during a panel discussion at the recent Photonics West event in San Francisco, Hamamatsu Corporation VP Kenneth Kaufmann pointed out one of the difficulties in doing that in the photonics sector, where research and development expenditure tends to be very high. Kaufmann said that Hamamatsu typically spends 10-13% of its revenues on R&D, a much larger proportion than many other industries, but that it was under pressure to deliver lower-cost products.
Unlike many of its US-based competitors, however, Hamamatsu does not enjoy the profit-boosting benefit of selling high-margin products to military customers.
Despite the sales slowdown, Hamamatsu said that it was retaining its revenue projections for the six months ending March and also the fiscal year ending in September. For the full year, it has set a goal of delivering ¥107.7 billion sales and ¥14.7 billion profit.
At the Photonics West trade show, the company was showcasing its new InGaAs image sensors, designed for near-infrared applications in thermal imaging and laser beam profiling and available in both 64x64 pixel and 128x128 pixel formats.