Sumitomo Electric Lifts Full-Year Profit Target on AI Data-Center Optics Demand

Sumitomo Electric Industries booked a 61% jump in first-quarter operating profit and used the beat to raise its full-year outlook before the half-year mark.

For the three months to June 2026, consolidated net sales rose 15.9% year-on-year to ¥1.33tn, operating profit climbed to ¥97.1bn and net profit attributable to parent shareholders rose 89.1% to ¥66.4bn.

The clearest driver was the Information and Communications segment. Demand for optical wiring equipment and optical devices used in data centers rose "against the backdrop of the expanding generative AI market," the company said, with yen weakness adding further lift. Segment sales rose ¥24.8bn to ¥86.5bn, and segment operating profit more than tripled, up ¥19.1bn to ¥27.2bn.

Other units were mixed. The environment and energy segment's sales fell ¥9.8bn to ¥253.0bn after a construction-services subsidiary was removed from the consolidation scope, though operating profit still rose ¥1.6bn to ¥15.3bn as copper prices climbed. The automotive segment's sales rose ¥132.2bn to ¥802.8bn on wire-harness and vibration-rubber demand, a weaker yen and higher copper prices, but operating profit dipped ¥561mn to ¥26.0bn as Middle East-related material costs added pressure.

On the strength of the quarter, management raised the full-year forecast it issued in May: consolidated sales guidance moves up ¥100bn to ¥5.4tn, and operating profit guidance rises ¥25bn to ¥450bn. The half-year forecast to September also moved higher, with operating profit guidance up ¥28bn to ¥195bn.

Sumitomo Electric said the quarter absorbed cost pressure and some lost sales tied to Middle East conditions, and that the revised targets reflect demand visibility into the second quarter and beyond.