Fanuc Shares Plunge by Most in Over a Decade Amid Profitability Concerns

By Jason Chau

Shares of Fanuc suffered their largest single-day loss in more than a decade as investors sold off the Japanese robotics maker on concerns that rising orders won't necessarily translate into stronger earnings amid higher component costs.

The stock plunged as much as 19% on Monday before ending 14% lower, its sharpest drop since 2008.

The decline came despite the robotics arm supplier reporting a better-than-expected 35% increase in net profit for the quarter ended June, according to a poll of analysts by Visible Alpha. Sales and orders improved as well, climbing 18% and 37%, respectively.

The strong results also led to raised earnings forecast for the fiscal year.

However, investors appeared concerned that the jump in first-quarter sales and orders didn't result in a similarly robust outlook upgrade. The company raised its annual sales and operating income forecasts by a more modest 4.2% and 2.7%, respectively.

Fanuc in its earnings report said it has stepped up sales and procurement efforts and implemented cost-cutting measures amid growing geopolitical risks and capital spending. Prices of electronic components, particularly semiconductors such as memory chips used in robotics, remained elevated in recent months amid robust demand and persistent supply shortages.

"The order surge should not translate one-for-one into revenue because parts shortages constrain shipments and longer lead times prompted some advance orders," Morningstar analysts said.

While Morningstar also raised sales and operating profit projections for Fanuc, it said "component inflation and limited pricing pass-through temper operating leverage."

Still, analysts say the Japanese company's longer-term outlook remains positive.

Fanuc, which also produces computer numerical control systems that are integral to industrial automation, is among the key Japanese companies benefiting from the global artificial-intelligence boom as demand for AI applications, including physical AI, continues to soar.

Morningstar analysts expect booming AI server investment to support demand for Fanuc's products, which are used by machine tools for chips manufacturing, data-center cooling and power-equipment production.

The company is also expected to retain its competitive advantage in control platforms and existing installations, supported by its open architecture, which allows machine developers to build solutions around its hardware, while an efficient manufacturing model should protect its profitability, they said.

Write to Jason Chau at jason.chau@wsj.com

(END) Dow Jones Newswires

August 03, 2026 07:37 ET (11:37 GMT)