Its true Nikon Operating Profits Triple
Posted: Tue Feb 07, 2006 7:02 pmNikon Raises Forecast on More Profitable Cameras (Update2)
Feb. 6 (Bloomberg) -- Nikon Corp., the world's fifth-biggest digital camera seller, raised its annual forecasts for the second time this year on sales of higher-margin products such cameras with changeable lenses and machinery used to make chips.
Net income for the year ending March 31 will probably rise to 18 billion yen ($152 million), 20 percent more than its November forecast, the Tokyo-based company said today in a statement. That compares with 24.1 billion yen in the last fiscal year when it booked a lawsuit-related gain.
Nikon is focusing on digital single-lens reflex cameras as price competition in the compact model market drove out Konica Minolta Holdings Inc. and Kyocera Corp. Nikon is also attracting more orders for its higher-margin steppers, machines that print circuitry onto silicon wafers, as demand for chips and large liquid-crystal displays increases.
``Today's forecast revision suggest that we can expect continued return into next year on single-reflex lens models,'' said Hisashi Moriyama, a Tokyo-based analyst at JPMorgan & Chase Co. ``The strategy of not competing on prices in steppers is also working out well.''
Nikon raised its operating profit estimate by 18 percent to 53 billion yen. The company also increased its sales forecast by 10 billion yen to 710 billion yen.
Shipments
Nikon joins market leader Canon Inc. in targeting interchangeable lenses and camera bodies, which have higher margins than compact models, to combat price competition.
``Profit will rise in the camera business because of the change in product mix with more emphasis on high-end SLRs,'' said Nikon's chief financial officer Ichiro Terato, during a press conference in Tokyo. ``Our new compacts like those that have face recognition technology and improved designs have been selling well.''
The company raised its operating profit target for its camera business by 29 percent to 33 billion yen, which compares with 16.8 billion yen a year earlier. Sales will rise to 399 billion yen from 354 billion yen.
Nikon also increased its full-year target for digital camera shipments, including single-lens reflex models, to 8.4 million units from 8 million units. Shipments soared to 2.28 million units in the third quarter from 1.5 million a year earlier.
Shipments of single-lens reflex models will rise to 1.4 million this year from 1.05 million a year earlier.
The company lowered its shipment forecast of its ``D50'' model by 200,000 units on less-than-expected sales, Terato said. The company will focus on a model introduced in December, the ``D200'' SLR, raising production by 40 percent to meet demand. The new model is already out of stock, he said.
Steppers
Nikon expects its most advanced types of steppers used for chips to make up a bigger proportion of the total shipments, Terato said. Such models, also known as ArFs, will make up 27 percent of total shipments this year, compared with an earlier target of 25 percent.
Operating profit of its steppers business will surge 58 percent to 18 billion yen this year. Sales will rise by 10 percent to 234 billion yen.
Nikon beat its two rivals, Canon and ASML Holding NV in market share for steppers used for chip production last year with 36 percent, the company said. ASML of the Netherlands, the world's biggest maker of steppers used for chips and liquid- crystal displays, had 33.6 percent.
Nikon's third-quarter operating profit more than tripled to 19.8 billion from a year earlier. Sales gained 26 percent to 193 billion yen. Earnings were also boosted by a weaker yen, which increases the value of repatriated earnings.
The company said the yen added 4 billion yen on operating profit in the nine months to Dec. 31, and boosted sales by 20 billion yen.
Shares of Nikon rose 2.3 percent to 2,215 yen in Tokyo. The company announced earnings after equity markets closed.
To contact the reporter on this story:
Aiko Wakao in Tokyo at awakao@bloomberg.net.
Last Updated: February 6, 2006 05:17 EST
Feb. 6 (Bloomberg) -- Nikon Corp., the world's fifth-biggest digital camera seller, raised its annual forecasts for the second time this year on sales of higher-margin products such cameras with changeable lenses and machinery used to make chips.
Net income for the year ending March 31 will probably rise to 18 billion yen ($152 million), 20 percent more than its November forecast, the Tokyo-based company said today in a statement. That compares with 24.1 billion yen in the last fiscal year when it booked a lawsuit-related gain.
Nikon is focusing on digital single-lens reflex cameras as price competition in the compact model market drove out Konica Minolta Holdings Inc. and Kyocera Corp. Nikon is also attracting more orders for its higher-margin steppers, machines that print circuitry onto silicon wafers, as demand for chips and large liquid-crystal displays increases.
``Today's forecast revision suggest that we can expect continued return into next year on single-reflex lens models,'' said Hisashi Moriyama, a Tokyo-based analyst at JPMorgan & Chase Co. ``The strategy of not competing on prices in steppers is also working out well.''
Nikon raised its operating profit estimate by 18 percent to 53 billion yen. The company also increased its sales forecast by 10 billion yen to 710 billion yen.
Shipments
Nikon joins market leader Canon Inc. in targeting interchangeable lenses and camera bodies, which have higher margins than compact models, to combat price competition.
``Profit will rise in the camera business because of the change in product mix with more emphasis on high-end SLRs,'' said Nikon's chief financial officer Ichiro Terato, during a press conference in Tokyo. ``Our new compacts like those that have face recognition technology and improved designs have been selling well.''
The company raised its operating profit target for its camera business by 29 percent to 33 billion yen, which compares with 16.8 billion yen a year earlier. Sales will rise to 399 billion yen from 354 billion yen.
Nikon also increased its full-year target for digital camera shipments, including single-lens reflex models, to 8.4 million units from 8 million units. Shipments soared to 2.28 million units in the third quarter from 1.5 million a year earlier.
Shipments of single-lens reflex models will rise to 1.4 million this year from 1.05 million a year earlier.
The company lowered its shipment forecast of its ``D50'' model by 200,000 units on less-than-expected sales, Terato said. The company will focus on a model introduced in December, the ``D200'' SLR, raising production by 40 percent to meet demand. The new model is already out of stock, he said.
Steppers
Nikon expects its most advanced types of steppers used for chips to make up a bigger proportion of the total shipments, Terato said. Such models, also known as ArFs, will make up 27 percent of total shipments this year, compared with an earlier target of 25 percent.
Operating profit of its steppers business will surge 58 percent to 18 billion yen this year. Sales will rise by 10 percent to 234 billion yen.
Nikon beat its two rivals, Canon and ASML Holding NV in market share for steppers used for chip production last year with 36 percent, the company said. ASML of the Netherlands, the world's biggest maker of steppers used for chips and liquid- crystal displays, had 33.6 percent.
Nikon's third-quarter operating profit more than tripled to 19.8 billion from a year earlier. Sales gained 26 percent to 193 billion yen. Earnings were also boosted by a weaker yen, which increases the value of repatriated earnings.
The company said the yen added 4 billion yen on operating profit in the nine months to Dec. 31, and boosted sales by 20 billion yen.
Shares of Nikon rose 2.3 percent to 2,215 yen in Tokyo. The company announced earnings after equity markets closed.
To contact the reporter on this story:
Aiko Wakao in Tokyo at awakao@bloomberg.net.
Last Updated: February 6, 2006 05:17 EST