Sales, earnings slide for Hoya’s life care business

Sales and earnings declined during the fiscal 3rd quarter for Hoya Corp. (TYO:7741), which reported an overall profit gain for the period despite falling sales.

The Japanese conglomerate’s life care segment, which includes its eye care and endoscopy businesses, reported pre-tax profits of roughly $123.6 million (¥12.89 billion) on sales of $700.5 million (¥78.71 billion) for the 3 months ended Dec. 31. That’s a -6.4% pre-tax profit slide on a -2.0% top-line slip for the division.

Overall Hoya reported profits of $223.2 million (¥25.08 billion), or 57¢ (¥64.46) per share, on sales of $1.10 billion (¥124.10 billion), for profit growth of 4.4% on a -3.8% sales drop compared with the same period in 2015.

“During the quarter, the eyeglass lenses business grew overall due partly to stabilization of Asia operation,” CEO Hiroshi Suzuki said in prepared remarks. “For the endoscopes business, we are expecting a good outcome in the coming year with new products releases.”

Hoya said it expects to report profits of $774.3 million (¥87 billion) on sales of $4.21 billion (¥473.0 billion) for its fiscal 2017 year ending March 31.

“The eyeglass lenses business in the Japanese market has been adversely affected by shrinkage of the retail market, and Hoya’s sales have been restrained. In overseas markets, sales in all regions, including the Americas, Europe, and Asia, expanded on a local currency basis, but the impact of yen appreciation has been substantial, and overall sales in the eyeglass lenses business decreased compared with the same quarter of the previous year,” the company said. “In the contact lenses business, Hoya is continuing to open new specialized Eyecity stores and step up its promotional activities at existing stores. Sales for the third quarter expanded year on year.

“Sales of endoscopes for medical use in Europe, where the ratio of sales by region is largest, expanded on a local currency basis due to the introduction of new products and the strengthening of Hoya’s marketing capabilities. However, because of the adverse impact of the appreciation of the yen, overall sales decreased compared with the same quarter of the previous year,” Hoya said. “Sales of intraocular lenses for cataract surgery in the Japanese market, where new products were introduced last fiscal year, continued to be favorable. In addition, in overseas markets also, direct sales and sales through distributers continued to be firm, and expanded substantially over the same period of the previous year.”

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