Renesas Electronics recorded a swing to a full-year loss as finance expenses and valuation impairments offset resilient margins and growth in infrastructure-related sales.
For the year ended December 31, the Japanese chipmaker reported a loss attributable to owners of the parent of 51.8 billion yen, a reversal from a profit of 219.1 billion yen in the prior year. The company said finance costs surged during the period and that it had taken valuation losses on financial assets linked to Wolfspeed.
Revenue for the year declined 2% to 1.32 trillion yen from 1.35 trillion yen a year earlier, reflecting a slowdown in Renesas's core automotive business. Despite the weaker top-line, margins showed some resilience: operating margin narrowed to 15.2% from 16.5% in 2024.
Automotive revenue was notably softer, falling 9% year on year as market conditions in that sector eased. Partially offsetting that weakness, the industrial, infrastructure and IoT segment posted a 5.5% increase in sales, driven by stronger demand tied to infrastructure projects.
Investors reacted to a strategic move announced alongside the results: Renesas agreed to divest its timing business to SiTime Corporation (NASDAQ:SITM) in a transaction valued at roughly $3 billion. Shares of Renesas rose as much as 10% to 2,2840 yen by 01:18 GMT following the announcement. The company said the sale will let it concentrate on its core embedded compute and mixed-signal product lines, where it supplies microcontrollers, embedded processors and analog semiconductors.
Looking ahead, Renesas provided guidance for the March quarter on a non-GAAP basis, forecasting revenue between 367.5 billion and 382.5 billion yen, which implies a sequential recovery compared with recent quarters. It also projected an operating margin of around 32% for the period, while cautioning that semiconductor demand remains volatile.
Note: The company attributed the annual swing to a combination of higher finance costs and valuation losses on certain financial assets, and signalled a strategic refocus through the timing business divestiture.