Nikon Posts Group Loss in Fiscal Year
But Expects to Return to Profitability
By JAMES PARADISE
Dow Jones Newswires
TOKYO -- Nikon Corp. posted a parent loss of 9.87 billion yen ($80.4 million) in the year ended in March 31, but forecast a return to profit this year with help from an expected improvement in its semiconductor manufacturing-related equipment business.
But analysts said that while this year won't likely be as bad as last year, the company may still struggle to return to profit because capital spending by semiconductor makers world-wide may remain sluggish.
"I don't think there will be black ink, at least at the net profit level" this year, said Richard Kaye, an analyst as Merrill Lynch Japan. While the company may narrow its loss to half of last year, partly because of a reduction in start-up costs for excimer steppers used for producing semiconductors, Nikon may not get back into the black until the year ending in March 31, 2001, he said. This is because it won't be until next year that world-wide semiconductor production investment picks up, and the company's stepper business starts to recover, Mr. Kaye said.
Nikon said its net sales for the year declined 14% to 252.50 billion yen from 293.93 billion yen in the prior year. The company had a parent operating loss of 10.4 billion yen and a parent pretax loss of 9.62 billion yen.
In the year ended March 31, 1998, Nikon had an operating profit of 8.98 billion, pretax profit of 8.36 billion yen and net profit of 3.03 billion yen.
Nikon said its sales and profit were hurt last year by a decline in stepper sales. Total stepper sales, both those for semiconductor production and those for liquid crystal displays, dropped to 270 units from 465 the prior year and 595 in the year ended in March 1997.
In value terms, sales of semiconductor-related manufacturing equipment fell 30% to 109.39 billion yen last year, and the company had a loss on its sales of steppers, the size of which it didn't reveal. In the camera segment, which was profitable, sales rose 10% to 91.93 billion yen.
For the year ending March 31, 2000, Nikon forecasts overall sales of 290 billion yen, pretax profit of six billion yen and net profit of 3.5 billion yen. Profitability for this year will come from a return to profit on its stepper sales, which it forecasts will rise a little over 10% in unit terms, a boost to its camera business from new models introduced last year, and an improvement in profitability in its ophthalmic products and surveying instruments divisions, a Nikon spokesman said.
Mr. Kaye of Merrill Lynch thinks that Nikon's stepper business may continue to make losses this year, with capital spending by semiconductor makers probably weak in 1999 at $13 billion world-wide, down from $15 billion in 1998. In 2000, he forecasts, it will grow to $19 billion.
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