Denso announces share buyback of up to 200 billion yen as quarterly profit declines
Key Facts
On October 29, 2026, Denso announced it would repurchase up to 200 billion yen worth of treasury shares or 100 million shares, whichever is lower, to enhance shareholder returns and improve capital efficiency. The decision came as it reported first-half results for the fiscal year ended September 30, which showed revenue growth alongside falling profits. Consolidated revenue reached 3,843.5 billion yen, up 7.0% from the same period a year earlier. But consolidated operating profit fell 19.5% to 170.1 billion yen, while profit attributable to owners of the parent declined 8.8% to 119.8 billion yen. The company said revenue benefited from higher vehicle sales and demand for products in its electrification and intelligence fields.
The decline was more pronounced in results for the July-to-September quarter, when operating profit was 86 billion yen, compared with 104.2 billion yen in the same quarter a year earlier. The figure was below the average forecast of 104.8 billion yen in a poll of nine analysts conducted by the London Stock Exchange Group. Denso said higher parts and materials costs, continued investment in future growth, and one-time expenses were the main reasons for the drop in operating profit. Chief Financial Officer Seiji Maeda added that foreign exchange gains, higher production volumes and business improvements were not enough to prevent the decline. Sales growth therefore did not translate into profit growth during the period.
Maeda said higher memory and aluminum costs contributed significantly to the increase in parts and materials costs. The company’s business in Asia also faced lower vehicle sales in China and higher materials costs in the six months through September. These pressures stand out in the results of a company that relies on Toyota group companies for more than half its revenue, according to Reuters. By contrast, Denso said higher vehicle sales and increased demand for electrification and intelligence products supported first-half revenue. The divergence between revenue and profit reflects the impact of rising expenses on the company’s performance despite stronger demand and sales.
Denso shares fluctuated after the results were announced, before recording a 2.3% gain in the latest trading cited by Reuters, compared with a 0.3% rise in the Nikkei 225. In trading before the announcement, DNZOY closed at $11.42 on October 28, according to EL7 data. The company did not specify in its buyback announcement whether the program would be carried out in one transaction or in stages. Denso kept its annual dividend forecast for the fiscal year ending March 31, 2027, at 74 yen per share, unchanged from its previous announcement. It is scheduled to report third-quarter results for fiscal 2027 in late January 2027.