Murata Manufacturing beats profit estimates as AI data center demand strains production capacity

Murata Tops Profit Estimates on Rising AI Data Center Demand

Murata Manufacturing Co. reported fourth-quarter earnings that beat analyst estimates, fueled by robust demand from artificial intelligence data center builders. Net income in the three months through March was ¥76.57 billion ($477 million), the Kyoto, Japan-based company said Thursday. Analysts estimated ¥60 billion on average. Revenue was ¥460.62 billion, also better than expected. Murata's shares surged as much as 8.8% after the results. Murata is the world's leading supplier of multilayer ceramic capacitors, an essential component for every device that uses electricity because it regulates power flow. The company's high-end MLCCs are sought by US hyperscalers building up AI data centers, and the company has been saying its production pace is struggling to catch up with runaway demand. A surge in material costs stemming from elevated inflation and the US-Iran conflict is posing a risk, and investors are pressuring Murata management to raise prices to offset higher expenses and take advantage of the burgeoning demand. Murata's chief previously said the company is considering raising prices, and it is adjusting production line allotment so that it can make more high-end MLCCs while continuing to expand overall capacity. What Bloomberg Intelligence Says Sales and operating profit in 4Q for ceramic capacitors and inductors are set to climb on strong demand for AI servers, despite seasonal weak demand from smartphone customers. Sales and operating profit of radio frequency modules should have fallen on weak seasonal demand, though a recovery is possible in fiscal 2027. The battery business is poised to make a profit again, which can continue. Murata is set expand its operating profit in fiscal 2027 after incurring one-time non-recurring charges in the past year. -Masahiro Wakasugi, analyst Click hereBloomberg Terminal for research

Murata beats profit estimates as AI data-center demand strains production

Murata Manufacturing has reported fourth-quarter earnings that beat analyst estimates, fueled by robust demand from artificial-intelligence data-center builders. Net income in the three months through March was ¥76.57 billion ($477 million), the Kyoto-based company said Thursday. Analysts had estimated ¥60 billion on average. Revenue was ¥460.62 billion, also better than expected. Murata's shares surged as much as 8.8% after the results. The company is the world's leading supplier of multilayer ceramic capacitors (MLCCs), essential components for every device that uses electricity because they regulate power flow. The company's high-end MLCCs are sought by U.S. hyperscalers building up AI data centers, and the company has been saying that its production pace is struggling to catch up with runaway demand. A surge in material costs stemming from elevated inflation and the U.S.-Iran conflict is posing a risk, and investors are pressuring Murata management to raise prices to offset higher expenses and take advantage of the burgeoning demand. Murata's chief previously said the company is considering raising prices, and it is adjusting production line allotment so that it can make more high-end MLCCs while continuing to expand overall capacity.