Itochu reported results for the three months ended 30 June 2026 on 3 August - and anyone reading only the headline will conclude the exact opposite of the truth.
What was reported
| Quarter | Year ago | Change | |
|---|---|---|---|
| Revenue | 3,875.9 | 3,558.9 | +8.9% |
| Gross trading profit | 656.0 | 595.4 | +10.2% |
| Trading income | 205.5 | 170.7 | +20.3% |
| Profit before tax | 370.0 | 374.8 | -1.3% |
| Net profit | 293.8 | 283.9 | +3.5% |
| Core profit | 249.5 | 181.0 | +38% |
In billions of yen
The gap, and the explanation
3.5% against 38%. The same company, the same quarter, two numbers telling opposite stories.
The explanation sits in one line: one-off capital gains fell from ¥103.0 billion to ¥44.5 billion - a drop of ¥58.5 billion.
Last year Itochu sold C.P. Pokphand and PROVENCE HUILES and booked enormous gains. This year it sold less: ¥34.0 billion from the CIECO Azer sale, and ¥9.0 billion on the Hitachi Construction Machinery transaction.
And why core profit is the right number
Core profit is profit excluding one-off capital gains and losses - what the business generates from ongoing operations, without asset sales.
¥249.5 billion, a first-quarter record, up 38%. That is the number describing what actually happened: Itochu's business is running hard, while the headline looks flat only because last year contained larger asset sales.
And this is exactly the pattern that has followed us all earnings season - only in the opposite direction from Amazon, where a one-off revaluation inflated the headline upward. Here it compresses it downward.
Where the growth came from
Trading income - gross profit less SG&A - jumped 20.3% to ¥205.5 billion.
The leading segments: energy and chemicals, metals and minerals, ICT and financial business, and textiles. The same names appear in the revenue explanation, plus machinery and general products and realty.
And why did profit before tax fall? Gains on investments dropped ¥92.4 billion to ¥38.1 billion - the same one-off line, again.
A note on timing
The report published on 3 August is the flash report. The auditor-reviewed version of the statements was scheduled for separate disclosure on 6 August - standard Japanese practice, worth knowing for anyone tracking final figures.
The full map of Japan's earnings week: The Week Japan Reported
My Angle
A personal opinion of Ilan Abramov - not advice, not a recommendation
This is a piece about reading reports more than about Itochu.
If you read only headlines today, you would conclude Itochu lagged its sisters - 3.5% against 47% and 53%. The opposite is true: its business grew 38%.
The gap comes from the comparison base, not from performance. Last year it sold more assets, so the base is higher. That does not mean this year is weak - it means last year was exceptional.
And the rule I take from it: in trading companies, where asset sales are part of the model rather than a rare event, the headline is nearly worthless. You always have to find the core line.
