How puzzling. The Fujifilm Holdings Corp.'s stock price went from ~ 1,500 jpy to 2,750 jpy (today's close) since July 2012. And their 31, January financial summery states
"During the third quarter year to date of the fiscal year ending March 31, 2014, the Fujifilm Group recorded ¥1,774.4 billion in consolidated revenue (up 10.1% from the same period of the previous fiscal year). Consolidated revenue increased by ¥163.2 billion, comparing to the same period of the previous fiscal year, reflecting such factors as strong sales in the medical systems business, the graphic systems business, and the documents business, and positive effects of yen depreciation, in spite of harsh situations of sales of digital cameras owing to a decline in overall demand for compact digital cameras.
Income
Operating income totaled ¥99.6 billion (up 52.4% from the same period of the previous fiscal year), reflecting such factors as increases in sales, and positive effects of yen depreciation. Income before income taxes amounted to ¥114.2 billion (up 81.7% from the same period of the previous fiscal year), and the net income attributable to FUJIFILM Holdings totaled ¥62.5 billion (up 116.6% from the same period of the previous fiscal year), reflecting such factors as the improvement in foreign exchange gain."
Their net income increased ~ five fold since 3rd quarter 2009.
This does not resemble struggling to me... especially if you compare this to Nikon's corporate finances.
Of course smart phones have killed Fujifilm's P&S camera business. Yes, the digital camera division is subsidized by the other business sectors, but the subsidy levels are low. Their total corporate R&D budget is about 7% of their total corporate revenue. So how much of a drag is the digital camera division?
Fuji's Imaging Solutions section of the company has been in steep decline for over a decade.
Their 2006 revenues for Imaging Solutions was 25.8% of revenues. It is half that in 2013.
Imaging Solutions in 2006 was Y689,458. In 2013 it was Y294.8.
If you follow the Japanese business story and shareholder feedback, Fuji is heavily criticized for replacing the revenues form film with a very heavy, high-capital, low return investment into retail cameras, especially high-end models. Fuji has been heavily criticized as a sensor designer and fab owner for missing the camera phone market (mostly to Sony), instead putting it all into standalone Fuji sensors in limited run cameras (a couple of hundred thousand instead of tens of millions of units). The decline in revenues is not solely attributable to film (which has become negligible in the last 4 years) nor to P&S. It has a lot to do with having very high price points and the whittling away of the much broader consumer base.
That is why Fuji went on a low-end tear. They are losing mindshare as a consumer electronics retailer, a position the spent 40 years building up. Compact camera sales losses are nowhere near being made up for my the X-series. If they lose 10 compact customers they are only getting 1 X-series customer. Fuji's losing volume sales to become yet another brand aiming only at the high-end. Can they all do that? Canon and Fuji are probably the most consumerist brands in photography (now that Kodak is a shell).
Fuji's camera division is in danger (along with Olympus's) of becoming a very small cog in a much larger company where the real revenues and decision-making come from B2B segments. Retail products are low margin and, to be honest, at Fuji's recent price points, quite low volume. Of concern is Fuji's photo division longtime operating losses.
The pattern is not dissimilar to Minolta or Konica. Forget all the chatter here and on DP Review. That actually makes little difference. At some point the Fuji Imaging Solutions division is going to have to stop bleeding revenues. Their latest operating losses have appeared to slow, but they've done that before. Fuji's photo division solely based on digital photography has been working at an operational net loss for quite some time now. Putting it bluntly: they've been losing money even on the X-series. That cannot last. How much longer? Hard to say. It's a well run company but increasingly its focus is not on cameras. Of particular concern to investors is Fuji's reliance on very expensive in-house, proprietary technology, especially in its camera division. I suspect their sensors are substantially costlier to produce than Sony or Samsung's, and that has contributed to their poor bottom line. While Olympus has experienced a spectacular blow-up an public shame almost unheard of in Japanese corporate society, there is apparently tension at Fuji as well.
I am not saying that their products are not very good (I own Fuji cameras). But JK Rowling got rich writing wizard stuff. Fuji's not pulling a JK Rowling with their cameras. The market right now is primed for some consolidation (Sony and Olympus was just a hint) and probably some ending of product lines.
