NOK Corporation (7240): FY2025 Results Summary — Net Income Up 52.7% as the Eagle Industry Integration Nears

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NOK Corporation reported net sales of 738.4 billion yen for FY2025 (the fiscal year ended March 2026), down 3.7% year on year, with operating income of 33.0 billion yen, down 11.5%. The company states that consolidated operating income was almost in line with the forecast announced in November 2025. Net income attributable to owners of parent rose 52.7% to 46.3 billion yen, partly due to the gain on sale of investment securities. For FY2026 NOK forecasts net sales of 756.6 billion yen and operating income of 35.0 billion yen on the current NOK consolidated basis, ahead of its scheduled management integration with Eagle Industry in October 2026.

Consolidated Results (Full-Year Actual)

Net sales declined 3.7% to 738.4 billion yen and operating income fell 11.5% to 33.0 billion yen, taking the operating margin down 0.4pt to 4.5%. Both figures came in above the FY2025 forecast announced in November 2025 (net sales 726.9 billion yen, operating income 32.9 billion yen). Ordinary income rose 3.7% to 49.8 billion yen and net income attributable to owners of parent rose 52.7% to 46.3 billion yen, with EPS at 284.84 yen, up 100.03 yen. The average exchange rate was 150.09 yen/USD against 152.74 yen/USD in FY2024, and the company states the year-on-year FX impact was +0.8 billion yen on net sales and +0.0 billion yen on operating income.

Item	FY25 Actual	FY24 Actual	Changes	FY25 Forecast (announced Nov. 2025)
Net sales	738.4	766.9	(3.7)%	726.9
Operating income	33.0	37.3	(11.5)%	32.9
Operating margin	4.5%	4.9%	(0.4)pt	4.5%
Ordinary income	49.8	48.1	+3.7%	45.1
Net income (profit attributable to owners of parent)	46.3	30.3	+52.7%	36.5
EPS (yen)	284.84	184.81	+100.03	223.47
Ave Fx rate (Yen/USD)	150.09	152.74	–	–

Segment Results

In the Seal segment, net sales rose 4.7 billion yen to 367.4 billion yen and operating income rose 1.6 billion yen to 27.9 billion yen, lifting the operating margin 0.3pt to 7.5%. The company cites the favorable impact of price negotiation efforts together with increased sales to general industry machinery such as the construction industry, with an FX impact of +1.4 billion yen. In the operating income analysis, the impact of sales contributed +3.2 billion yen and variable costs, etc. +2.6 billion yen (material costs and other cost reductions), while fixed costs were a negative 4.2 billion yen (personnel and operating expenses) and FX +0.1 billion yen.

In the Electronic Products segment, net sales fell 25.8 billion yen to 345.1 billion yen and operating income fell 5.0 billion yen to 4.0 billion yen, with the operating margin down 1.3pt to 1.1%. Sales decreased for automobile and smartphone applications; excluding FX and component costs, the sales decline was approximately 7.0 billion yen. The company lists FY2025-specific factors as lower production efficiency, an FX impact due to local currency appreciation against the USD at Asian sites, and the cancellation of multiple projects for in-vehicle batteries. Both segments exceeded their November 2025 net sales forecasts, and Electronic Products also exceeded its operating income forecast of 3.5 billion yen, while Seal came in slightly below its 28.2 billion yen operating income forecast.

Segment	Metric	FY25 Actual	FY24 Actual	Changes	FY25 Forecast (announced Nov. 2025)
Seal	Net sales	367.4	362.7	+4.7	366.1
Seal	Operating income	27.9	26.2	+1.6	28.2
Seal	OPM (%)	7.5%	7.2%	+0.3pt	7.7%
Electronic Products	Net sales	345.1	371.0	(25.8)	334.4
Electronic Products	Operating income	4.0	8.9	(5.0)	3.5
Electronic Products	OPM (%)	1.1%	2.4%	(1.3)pt	1.0%

FY2026 Forecast

NOK forecasts FY2026 net sales of 756.6 billion yen (+2.5%) and operating income of 35.0 billion yen (+6.1%), with the operating margin improving 0.1pt to 4.6%. Ordinary income is forecast at 48.3 billion yen, a change of (3.1)%, and net income at 46.4 billion yen (+0.1%), with EPS of 285.22 yen. The assumed average exchange rate is 155.00 yen/USD. The company notes that because NOK is scheduled to integrate with Eagle Industry in October 2026, this financial forecast represents the full-year forecast for the fiscal year 2026 for the current NOK CORPORATION.

By segment, Seal net sales are forecast at 393.4 billion yen (+7.1%) and operating income at 30.8 billion yen (+10.6%), with an OPM of 7.8%. The forecast includes an FX impact of approximately +5.0 billion yen, plus an increase of approximately 13.0 billion yen in net sales and approximately 1.5 billion yen in operating income from the transfer into Seal of the Precision rubber and plastic components business for HDDs (previously in Electronic Products) and ESTOH Co., Ltd. (previously in “Others”), which the company states has no impact on consolidated business results. Electronic Products net sales are forecast at 356.8 billion yen (+3.4%) and operating income at 3.5 billion yen, a change of (11.8)%, with an OPM of 1.0%; the FX impact is significant at approximately +11.0 billion yen, and excluding FX and component costs net sales are seen decreasing by approximately 1.5 billion yen on a comparable basis. For Electronic Products the company expects an operating loss in Q1 and operating profit in each quarter from Q2 through Q4.

Item	FY26 Initial FCST	FY25 Actual	Changes
Net sales	756.6	738.4	+2.5%
Operating income	35.0	33.0	+6.1%
Operating margin	4.6%	4.5%	+0.1pt
Ordinary income	48.3	49.8	(3.1)%
Net income (profit attributable to owners of parent)	46.4	46.3	+0.1%
EPS (yen)	285.22	284.84	+0.38
Ave Fx rate (Yen/USD)	155.00	150.09	–
Seal: Net sales	393.4	367.4	+7.1%
Seal: Operating income	30.8	27.9	+10.6%
Seal: OPM (%)	7.8%	7.5%	+0.2pt
Electronic Products: Net sales	356.8	345.1	+3.4%
Electronic Products: Operating income	3.5	4.0	(11.8)%
Electronic Products: OPM (%)	1.0%	1.1%	(0.2)pt

Shareholder Returns

NOK’s capital allocation policy, announced in May 2025, places top priority on strategic investment (for organic and inorganic growth and capital expenditure), applies progressive dividends based on mid- to long-term business growth (a revision of the previous description “stepwise increase of dividends”), and considers share buybacks with comprehensive consideration of the cash status including business investment needs. Total shareholder returns over the previous Medium-Term Plan period reached 83.0 billion yen, comprising dividends of 53.6 billion yen (the FY2025 year-end dividend is planned) and share buybacks of 29.4 billion yen, exceeding the previous MTP target of over 67.5 billion yen. The FY2026 dividend forecast is a full-year 140 yen (interim 70 yen, year-end 70 yen), based on the current NOK (7240); the dividend forecast after the integration with Eagle Industry will be announced after the listing of the holding company.

On cross-shareholdings, NOK reduced the number of stocks held from 82 as of March 2023 to 51 as of March 2026, a 40% decrease versus March 2023 against a previous MTP target of divesting 25% of the balance as of March 31, 2023 on a market value basis. Going forward the company plans to further accelerate the divestment of shares targeted for sale to improve capital efficiency, aiming for those shares to be either completely divested or covered by a fixed divestment plan by the end of FY2028.

Item	Previous MTP Target	Actual
Total shareholder return (3 years)	over 67.5 bil.	83.0 bil.
Dividend	–	53.6 bil.
Share buyback	–	29.4 bil.
FY2026 dividend forecast (per share)	–	Full-year 140 yen (Interim 70 yen, Year-end 70 yen)
Cross-shareholdings: number of stocks	–	82 stocks (Mar. 2023) to 51 stocks (Mar. 2026)
Cross-shareholdings: divestment on market value basis	25%	40%

Medium-Term Plan Review and New MTP (FY2026-2028)

Against the previous Medium-Term Plan (FY2023-2025) targets set in May 2023, FY2025 net sales of 738.4 billion yen fell short of the 845.0 billion yen target and operating income of 33.0 billion yen fell short of the 57.5 billion yen target, giving an operating margin of 4.5% against the 6.8% target. Net income of 46.3 billion yen exceeded the 41.8 billion yen target and ROA of 5.0% exceeded the 4.6% target, while ROE of 7.7% was below the 8% target. By segment, Seal recorded net sales of 367.4 billion yen against a 415.0 billion yen target and operating income of 27.9 billion yen against 41.9 billion yen; Electronic Products recorded net sales of 345.1 billion yen against 401.8 billion yen and operating income of 4.0 billion yen against 14.0 billion yen. The company attributes the Seal shortfall to the gap between actual Japanese OEM automobile production volume and the initial MTP assumptions and to general industrial machinery sales such as semiconductor manufacturing equipment not materializing as planned, and the Electronic Products shortfall primarily to the slowdown in BEV market growth, while noting that structural reforms achieved profitability in both FY2024 and FY2025.

The new Medium-Term Plan (FY2026-2028) is positioned as a phase of “Execution of Transformation” based on the foundation built in the previous plan. Its strategic goals are completion of profitability improvement measures, optimization and sophistication of the global operating model, and business creation and acquisition for inorganic growth. Key initiatives include establishing and executing a pricing strategy in the Seal business, execution and completion of cost reduction measures, review of unprofitable and non-core businesses, reduction of indirect material costs across the Group, ERP implementation with an appropriate investment scale, and improvement of efficiency in group indirect operations.

Integration with Eagle Industry

NOK states that preparation for the integration with Eagle Industry is progressing steadily. The next milestone is the Ordinary General Meeting of Shareholders to be held in June 2026; the current NOK (7240) and Eagle Industry (6486) are scheduled to be delisted at the end of September 2026, and the newly established holding company, “NOG Group Co., Ltd.,” is scheduled to be listed on October 1, 2026. Strategies and business plans as an integrated company are scheduled to be announced after the integration. Over the next three-year period the company expects cost-related effects to be the primary synergy factor, and it aims for the operating income of the integrated company in FY2028 to exceed the simple aggregate of both companies’ individual plans by more than 10% (double digits).

On the situation in the Middle East, the company states that no impacts were observed in April results, that as of now it has observed no significant impacts on sales forecasts by customers, that in principle it aims to absorb increased costs by passing them through to prices, and that the initial financial forecast for FY2026 is intended to absorb currently recognized financial impacts. It adds that the impact on the Seal business is assumed to be relatively larger than that on the Electronic Products business, and that it will consider reviewing the business forecast if the current unclear environment continues.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.