Mitsubishi Electric Corp.

For Q3 FY25, Mitsubishi Electric reported revenue of JPY 1,356.7 billion, up JPY 112.8 billion year over year, and operating profit of JPY 126.8 billion, up JPY 40.3 billion year over year; operating margin improved 2.4 percentage points to 9.4%. Excluding the roughly JPY 24 billion gain on the MD LOGIS share transfer, operating margin was 7.6%. For the first nine months, revenue was JPY 4.3 trillion, operating profit JPY 303.5 billion, and operating margin 7.6%, all record highs. Full-year FY25 guidance was updated to revenue of JPY 5.4 trillion, up JPY 10 billion from prior forecast, with operating profit unchanged at JPY 400 billion.

The lead commentary emphasized that the quarter benefited from a weaker yen, stronger sales in Infrastructure and Life, and ongoing profitability/efficiency initiatives across the portfolio. Management sounded constructive on Infrastructure, especially Public Utility, Energy Systems, and Defense & Space, and said those businesses should continue to grow steadily, though some of the margin strength is temporary in nature. At the same time, they acknowledged weaker-than-expected conditions in FA Systems and tougher pricing/demand dynamics in Automotive Equipment.

Masuda highlighted the hard numbers and balance-sheet/cash-flow improvement: assets rose JPY 67.4 billion from fiscal year-end, inventory increased JPY 82.2 billion but was down JPY 2.7 billion year over year, and equity attributable to Mitsubishi Electric shareholders reached JPY 3,910.3 billion. Operating cash flow for the first nine months increased JPY 109.1 billion year over year to JPY 308.1 billion, investing cash flow was an outflow of JPY 133.9 billion, and free cash flow was an inflow of JPY 174.1 billion, up JPY 174.2 billion year over year. He also said SG&A rose JPY 24 billion in Q3, partly due to weaker-yen translation, personnel, and R&D, while operating profit benefited from the MD LOGIS gain and foreign exchange.

There was no live analyst Q&A in the transcript, so the main discussion points were management’s own explanations of segment trends and guidance changes. The biggest concern flagged was weakness in FA Systems, where demand for highly profitable medium- to large-sized controllers and servers remains weak, and in Automotive Equipment, where China demand was softer and price improvements are still being negotiated. Management offset that with an upward revision to Defense & Space Systems and Semiconductor & Device, and said the company is still aiming to close pricing actions in Automotive in Q4.