Strong Sales of D2X, D200 + Steppers improve NIKON profits
Posted: Mon May 15, 2006 8:13 pmNikon 05/06 net profit up 20 pct, sees more growth
TOKYO, May 15 (Reuters) - Japan's Nikon Corp. posted a 20 percent rise in annual net profit on Monday on strong demand for digital cameras, high-end steppers and a softer yen, but it forecast a weaker-than-expected earnings gain this year.
Nikon has been cashing in on brisk sales of new compact digital cameras, including one equipped with face recognition technology, as well as digital single lens (SLR) models -- high-end cameras that use interchangeable lenses.
Its earnings have also been lifted by efforts to improve the efficiency with which it makes steppers, machines used to produce chips and liquid crystal displays. The only other two producers are Canon Inc. and Netherlands-based ASML .
Nikon, the world's fifth-largest digital camera maker, said group net profit would rise 28 percent to 37 billion yen ($337.5 million) in the year to next March 31, below the average forecast of 39 billion yen from five analysts polled by Reuters Estimates.
Nikon forecast profit in its digital camera division to fall this business year amid fierce competition with rivals such as Canon, Sony Corp. and Eastman Kodak , and because it is not expecting another big boost from a softer yen.
"Competition in the digital camera market is tough so we are taking a cautious view," Nikon Chief Financial Officer Ichiro Terato told a news conference.
For the year ended March 31, Nikon's net profit came to 28.94 billion yen, up from 24.14 billion yen a year earlier and better than the company's estimate of 28 billion yen, revised up late last month to reflect robust camera sales and a weaker yen.
The outlook for its stepper division is much brighter with the semiconductor market in an upswing and LCD producers like Sharp Corp. aggressively building new plants to meet fast-growing demand for LCD TVs.
ASML posted a fall in profit for the January-March quarter but pulled in more new orders than expected, boding well for future sales. Canon, meanwhile, last month raised its 2006 chip stepper shipment forecast by 14 percent.
Nikon predicted sales of chip steppers would rise 7 percent to 170 units in 2006/07 while LCD steppers are seen up 22 percent at 82 units, with a higher proportion of orders to come from LCD makers cutting panels from seventh- and eighth-generation glass.
"The more the LCD market shifts to larger sizes the more it plays to our strengths," Terato said.
Nikon said it expected digital camera shipments to increase about 5 percent to 8.85 billion units. All of that growth is seen coming from digital SLR models, with shipments of compacts expected to remain flat at around 7.1 million units.
Nikon, the world's second-largest maker of digital SLR models after Canon, has been booking strong sales of the D2X, a high-powered SLR that retails for about 500,000 yen, and it is boosting output of the less expensive D200 to meet strong demand.
But Nikon said that much of its good fortune in the past business year was due to a weaker yen, and estimated that operating profit in its imaging division would likely fall 10 percent in 2006/07 considering the yen's recent strength.
The Tokyo-based company said profit in its stepper unit would increase by nearly 40 percent as it sells more expensive steppers and reaps the benefits of cost-cutting steps, which include shortening lead times and using common platforms in development.
Shares in Nikon rose 71 percent in 2005/06, outperforming the Tokyo stock market's precision machinery index, which gained 43 percent. Prior to the announcement, Nikon's shares closed up 0.23 percent at 2,140 yen while the precision machinery index fell 0.93 percent. ($1=109.62 Yen)
TOKYO, May 15 (Reuters) - Japan's Nikon Corp. posted a 20 percent rise in annual net profit on Monday on strong demand for digital cameras, high-end steppers and a softer yen, but it forecast a weaker-than-expected earnings gain this year.
Nikon has been cashing in on brisk sales of new compact digital cameras, including one equipped with face recognition technology, as well as digital single lens (SLR) models -- high-end cameras that use interchangeable lenses.
Its earnings have also been lifted by efforts to improve the efficiency with which it makes steppers, machines used to produce chips and liquid crystal displays. The only other two producers are Canon Inc. and Netherlands-based ASML .
Nikon, the world's fifth-largest digital camera maker, said group net profit would rise 28 percent to 37 billion yen ($337.5 million) in the year to next March 31, below the average forecast of 39 billion yen from five analysts polled by Reuters Estimates.
Nikon forecast profit in its digital camera division to fall this business year amid fierce competition with rivals such as Canon, Sony Corp. and Eastman Kodak , and because it is not expecting another big boost from a softer yen.
"Competition in the digital camera market is tough so we are taking a cautious view," Nikon Chief Financial Officer Ichiro Terato told a news conference.
For the year ended March 31, Nikon's net profit came to 28.94 billion yen, up from 24.14 billion yen a year earlier and better than the company's estimate of 28 billion yen, revised up late last month to reflect robust camera sales and a weaker yen.
The outlook for its stepper division is much brighter with the semiconductor market in an upswing and LCD producers like Sharp Corp. aggressively building new plants to meet fast-growing demand for LCD TVs.
ASML posted a fall in profit for the January-March quarter but pulled in more new orders than expected, boding well for future sales. Canon, meanwhile, last month raised its 2006 chip stepper shipment forecast by 14 percent.
Nikon predicted sales of chip steppers would rise 7 percent to 170 units in 2006/07 while LCD steppers are seen up 22 percent at 82 units, with a higher proportion of orders to come from LCD makers cutting panels from seventh- and eighth-generation glass.
"The more the LCD market shifts to larger sizes the more it plays to our strengths," Terato said.
Nikon said it expected digital camera shipments to increase about 5 percent to 8.85 billion units. All of that growth is seen coming from digital SLR models, with shipments of compacts expected to remain flat at around 7.1 million units.
Nikon, the world's second-largest maker of digital SLR models after Canon, has been booking strong sales of the D2X, a high-powered SLR that retails for about 500,000 yen, and it is boosting output of the less expensive D200 to meet strong demand.
But Nikon said that much of its good fortune in the past business year was due to a weaker yen, and estimated that operating profit in its imaging division would likely fall 10 percent in 2006/07 considering the yen's recent strength.
The Tokyo-based company said profit in its stepper unit would increase by nearly 40 percent as it sells more expensive steppers and reaps the benefits of cost-cutting steps, which include shortening lead times and using common platforms in development.
Shares in Nikon rose 71 percent in 2005/06, outperforming the Tokyo stock market's precision machinery index, which gained 43 percent. Prior to the announcement, Nikon's shares closed up 0.23 percent at 2,140 yen while the precision machinery index fell 0.93 percent. ($1=109.62 Yen)
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