Komatsu Forecasts 27% Profit Drop Amid Strong Yen, U.S. Tariffs

Komatsu Ltd. (OTC:KMTUY), Japan’s leading construction machinery manufacturer, projected a 27% decline in operating profit for the fiscal year ending March 2026. The company cited a stronger yen and rising costs driven by new U.S. tariffs as major challenges. Komatsu now expects operating profit to fall to 478 billion yen ($3.33 billion), down from 657.1 billion yen recorded in the previous year, which represented 8.2% growth and surpassed analysts' average forecast of 605.7 billion yen, based on LSEG data.

For the last fiscal year, Komatsu reported revenues of 4.1 trillion yen and a net income of 439.6 billion yen. The company, which ranks as the world’s second-largest heavy equipment maker after Caterpillar (NYSE:CAT), generates over a quarter of its sales in North America. This exposure makes Komatsu particularly vulnerable to trade policies introduced under U.S. President Donald Trump.

In a move to enhance shareholder value, Komatsu also announced plans to repurchase up to 4.3% of its outstanding shares for 100 billion yen and subsequently cancel them. The share buyback reflects the company's effort to support its stock amid growing economic pressures.

Despite facing currency headwinds and trade uncertainties, Komatsu remains a critical player in the global construction equipment market, known for its excavators, bulldozers, and mining trucks. Investors will closely watch how the company navigates macroeconomic challenges in the coming months.