Fujifilm Holdings shares plunged by as much as 18% on Friday, the steepest drop on record for the company, after first-quarter earnings came in well below analyst expectations. Operating income for the quarter ended June was 51.2 billion yen ($323 million), compared with Bloomberg's average analyst estimate of 77.1 billion yen, as higher raw material costs and one-off expenses weighed on performance and underlying profit weakened in the healthcare and business innovation segments. At the same time, Fujifilm confirmed it is reviewing a partial spinoff of Fujifilm Business Innovation, formerly known as Fuji Xerox, a business that accounts for roughly 35% of consolidated sales. Under the plan, Fujifilm would retain a stake just under 20%, distribute the rest to shareholders as an in-kind dividend (non-cash share distribution), and seek a Tokyo Stock Exchange listing for the unit within two to three years, subject to shareholder approval and Japan's tax-qualified spinoff rules. Jefferies Japan analysts said the results point to a longer road back to profitability, while the proposal fits Fujifilm's VISION2030 strategy of prioritizing profitability and capital efficiency over raw sales growth. The move lands in a volatile Japanese earnings season that has already hit Kioxia's stock after a guidance miss last month, leaving open questions over whether investors will support Fujifilm's restructuring.