What a kessan tanshin is
The kessan tanshin (決算短信, literally a "brief report on financial results") is the earnings release that Japanese listed companies publish soon after the end of each quarter and each fiscal year. The Tokyo Stock Exchange requires listed companies to prepare it in a common format, so any two companies can be compared line by line.
It is published on TDnet, free to read, and it is the first official look at a company's results. A full-year release and three quarterly releases appear each year, and on peak days hundreds of them are published in a single afternoon. Many companies have a March fiscal year-end, so their full-year release appears in early to mid May.
How it is laid out
Page one is the summary, and it is the part that matters most. It contains:
- Consolidated results: net sales, operating profit, ordinary profit, profit attributable to owners of parent and earnings per share (EPS), with the percentage change from the previous year.
- Financial position: total assets, net assets, equity ratio and net assets per share.
- Dividends: actual and forecast.
- Consolidated earnings forecast: the company's guidance for the full year (and sometimes the half year).
The attached materials give management's qualitative commentary, segment results, the financial statements and the notes. Amounts are usually shown in millions of yen, which is worth checking before you compare companies.
Key terms in English
| Japanese | English | Note |
|---|---|---|
| 売上高 | Net sales | Revenue |
| 営業利益 | Operating profit | Profit from core operations |
| 経常利益 | Ordinary profit | Operating profit plus non-operating items such as interest and foreign exchange gains or losses. A line item specific to Japanese reporting. |
| 親会社株主に帰属する当期純利益 | Profit attributable to owners of parent | The "net profit" used for EPS |
| 通期 / 第2四半期(累計) | Full year / first half (cumulative) | Quarterly figures are usually cumulative from the start of the fiscal year |
| 連結業績予想 | Consolidated earnings forecast | Management's guidance |
When they are published
The exchange asks companies to publish the full-year release within 45 days of the fiscal year-end and regards 30 days as desirable. Quarterly releases are normally expected within 45 days of the quarter-end. For a company with a March year-end, that means early to mid May for the full year, early August for the first quarter, early November for the half year and early February for the third quarter.
Companies publish outside trading hours as well as during them, most often after the close or before the open. Since April 2024, quarterly securities reports have been abolished, which makes the quarterly kessan tanshin the main quarterly filing.
A reading order that saves time
- Progress against the full-year forecast. What share of the full-year operating profit forecast has been earned so far? A common rule of thumb is that around 45% or less at the half year raises downside risk, and well above 55% suggests upside, though seasonality varies by industry.
- Whether the forecast was revised. A revision is normally disclosed in a separate notice at the same time (see earnings forecast revisions).
- Segment operating profit. Check whether the main business is holding its margin, not just the company total.
- Non-operating and extraordinary items. Decide whether ordinary profit and net profit reflect lasting earning power or one-off gains.
- Operating cash flow. Profit without matching cash flow deserves a closer look.
- The commentary. Use management's explanation to find the reasons behind what looks unusual.
How to read the full-year forecast
The forecast at the bottom of the summary page is the company's official guidance. How the market reacts depends largely on how it compares with analysts' expectations. Japanese companies are widely seen as setting initial forecasts conservatively and raising them later in the year, in part because a downward revision is considered embarrassing. Reading a forecast therefore means reading the company's habits as well as its numbers. A company that states its forecast as "undetermined" is signalling poor visibility.
Three common misreadings
- Profit inflated by one-off items. A gain on selling a subsidiary or a fixed asset can make ordinary profit and net profit look strong. Judge the business on operating profit and check the notes for the breakdown.
- Accounting changes. A change in revenue recognition or accounting policy can make year-on-year comparisons misleading. Look for the note on changes in accounting policies.
- Forecast assumptions. Guidance depends on assumed exchange rates and raw material prices. If reality has moved far from the assumptions, a revision is likely.
Kessan tanshin vs. securities report
| Kessan tanshin | Securities report (yuho) | |
|---|---|---|
| Legal basis | Exchange listing rules | Financial Instruments and Exchange Act |
| Filed on | TDnet | EDINET |
| Timing | Within about 45 days of period-end (a fast first look) | Within three months of the fiscal year-end (definitive) |
| Audit | Prepared before the audit is finalized in many cases | Includes the audited financial statements |
| Volume | Key points, usually a few dozen pages | Comprehensive, often 100 to 200 pages |
The kessan tanshin tends to drive short-term price moves, while the securities report supports longer-term research.
English versions and how KabuNew helps
Since April 2025, Prime Market companies must publish their financial results in English at the same time as in Japanese, although a summary or excerpt is acceptable. Outside the Prime Market there is no such requirement. KabuNew reads the Japanese release and sends a three-line English summary with the key figures and an impact rating for the stocks you follow. AI summaries can contain errors, so check the original before you act. Nothing here is investment advice.