INTERVIEW-Kyocera gives upbeat earnings outlook
--From AOL.-- Cooters
KYOTO, Japan, June 27 (Reuters) - Japan's Kyocera Corp on Tuesday gave an upbeat earnings outlook for this business year, underpinned by sales of parts for the world's rapidly growing Internet and communications industries.
``Our business environment has turned positive,'' Kyocera president Yasuo Nishiguchi said ``I'm very happy to see a large part of our business is linked to the Internet communication business, an area where the market is fast growing.''
Profits at Kyocera, the world's biggest maker of integrated circuit ceramic packages, were exceeding its own estimates in the first quarter of the business year started in April, he said.
``Our sales and profits are thus proceeding at or above our earlier estimates made for this business year,'' he told Reuters in an interview.
In May, Kyocera said group net profit, calculated under U.S. accounting rules, soared 78.2 percent to 50.35 billion yen ($476.7 million) in the year ended in March. It predicted the profit would grow further, by 28.1 percent, this business year.
Nishiguchi said Kyocera, whose group includes the nation's second-biggest telecom firm DDI Corp, enjoyed solid sales of parts for mobile telecommunication tools as well as parts for U.S. fibre-optic telecommunication infrastructure.
``Infrastructure for fibre-optic telecommunications has been actively built up mainly in the U.S. and that has brought us orders for packages and other parts. The number of the orders is rapidly growing and so much more than it used to be,'' he added.
Referring to the expanding future of mobile phones, he said: ``If mobile phones are used just as telephones, the demand will hit the ceiling soon.''
The firm's capital spending for the next business year would be at or above this year's planned level of around 90 billion yen which largely centred on the parts business, he said.
Nishiguchi also revealed plans to set out a three-year business programme for Kyocera later this year.
``If we need M&A (merger and acquisitions) to strengthen our main areas, we will do that. Actually, we are now considering a few possible plans,'' he said.
Nishiguchi said he would focus on cdma2000 as the next generation mobile phone technology.
``We plan to focus (our production) more on cdma 2000,'' he said, noting their easier access to cdma 2000 technology as a result of its U.S. subsidiary Kyocera Wireless Corporation, set up after Kyocera bought a part of Qualcomm Inc
``Qualcomm has been on the central stage for developing cdma2000 technology,'' he added.
The choice of cdma2000 also matches the choice by three telecommunication carriers which will merge in October to form ``KDDI,'' Japan's second-largest telecom group. Kyocera will own 15.3 pct of KDDI's shares.
PROFIT POTENTIAL
Nishiguchi's remarks came during the Tokyo lunch break. Kyocera shares ended up 1.78 percent at 18,300 yen.
Shares in Kyocera, one of the nation's core high-tech stocks, have shed 35 percent since the start of January on what traders called a correction in high-priced high-tech and Internet issues across the globe.
But it's still in top recommendation list by analysts.
ING Barings last week revised up its earnings estimate for Kyocera's group earnings per share (EPS) to 409.8 yen from its previous estimate of 336.3 yen for this business year, while giving an ``estimated fair value price'' of 23,000 yen.
``Expanding its mobile phone business and improved profitability would help Kyocera's group EPS to achieve an annualised 23 percent growth over the next five years. Given the high profit potential, we would continue a positive stance towards Kyocera,'' ING said in a report.
($1-105.61 Yen)
06:17 06-27-00 |
