Kubota Posts Quarterly Operating Profit of ¥67 Billion, Below Analyst Estimates
Key Facts
Kubota reported results on Nov. 9 for the nine months ended Sept. 30, 2026, with revenue of ¥2,478.1 billion, up 12.4% from the same period a year earlier. But operating profit for the third quarter alone was ¥67.0 billion, below analysts’ forecast of ¥105.3 billion and the consensus estimate of ¥98.0 billion. The company said profit fell short of expectations because tariff refunds were slower than expected. Cumulative results showed growth in revenue and operating profit, while the quarterly figure revealed a gap between actual earnings and estimates. Kubota shares closed at ¥2,527.5 in the Nov. 6 session, before the results were announced.
Operating profit for the nine months was ¥302.6 billion, up 40.9% from the same period last year. Kubota attributed the improvement mainly to foreign exchange effects, price adjustments, higher sales of agricultural equipment and machinery in North America, and U.S. tariff refunds. By contrast, costs related to those tariffs and higher expenses caused by inflation weighed on results. This reflects a divergence between the cumulative earnings trend and the third-quarter result, which was affected by the pace of refunds during the period. The company said refunds were slower than expected, affecting its ability to reach the anticipated profit level.
Coverage of the results estimated tariff refunds in the third quarter at ¥19.0 billion, compared with the ¥60.0 billion the company had expected. It described the gap as the main reason operating profit fell short of estimates. This aligns with Kubota’s broader explanation that slower refunds contributed to earnings missing expectations. The company was awaiting action by the relevant authorities after completing the necessary procedures, according to the results materials. The quarterly shortfall was therefore partly linked to the timing of refunds, alongside the other costs the company cited in its cumulative results.
Conditions in the agricultural and construction equipment markets varied by region. In North America, the tractor market contracted as inflation weighed on business confidence and farm profitability, while demand for public and private construction remained resilient despite weakness in residential construction. In Europe, a heatwave weakened the tractor market, but the construction equipment market continued to recover, driven mainly by infrastructure demand. In Thailand, weak crop prices and higher fuel prices kept the market subdued. In India, the market continued to expand, supported by improving farmer incomes and government support, presenting a mixed regional picture for demand for agricultural and construction products.
Free cash flow for the nine months rose to ¥145.8 billion, an increase of ¥44.6 billion year on year. The company said it continues to tighten oversight of North American retail finance receivables. Free cash flow in the second quarter had reached ¥122 billion, while the operating profit margin for the same period was 13.9%. In the first six months of 2026, revenue rose 16.2% to ¥1,690.3 billion, and operating profit increased 64.7% to ¥235.6 billion. This comparison places the standalone third-quarter result within a period of strong cumulative growth, alongside a slowdown in the pace of quarterly earnings.
Kubota left its full-year financial guidance unchanged following the results announcement. The company had raised its forecast on Aug. 4 to annual revenue of ¥3,280 billion, operating profit of ¥400 billion and profit attributable to owners of the parent of ¥289 billion. It said at the time that the weaker yen and U.S. tariff refunds had supported the forecast revision. In the same announcement, it cited weak demand in key markets and higher costs related to the situation in the Middle East, while expecting the weaker yen and tariff refunds to continue supporting earnings. The unchanged annual guidance remains the company’s framework for results for the fiscal year ending Dec. 31, 2026.