To: Kent Rattey who wrote (43144 ) 10/4/1999 7:36:00 AM From: Kent Rattey Read Replies (1) | Respond to of 152472
Monday October 4, 6:12 am Eastern Time INTERVIEW-Kyocera sees strong 1999/2000 earnings By Yuka Obayashi TOKYO, Oct 4 (Reuters) - Kyocera Corp , the world's largest maker of computer chip ceramic casings, said it still expects earnings to jump more than 40 percent this year despite the yen's surge in value, thanks to robust sales of cellular phones. ''I am confident we will accomplish our earnings goal for the current fiscal year despite the yen's recent rise,'' Kyocera President Yasuo Nishiguchi told Reuters in a recent interview. ''Domestic sales of cellular phones and their components have been unexpectedly strong.'' Kyoto-based Kyocera, the nation's biggest maker of industrial ceramics, forecast in May its group net profit would rise 41.6 percent to 40 billion yen ($377 million) for the year ending next March 31. Nishiguchi said Kyocera, where exports account for almost 40 percent of total sales, had changed its assumed average exchange rate for the second half to 110 yen to the dollar, from 115 in May. Yet he added the company was not altering its earnings forecast. ''The negative impact from the higher yen will be offset by continued high demand for cellular phones and related parts worldwide,'' Nishiguchi said. In particular, Nishiguchi said sales were strong of its cdmaOne-format phones. Cdma stands for ''code division multiple access,'' a technology developed by U.S.-based Qualcomm Inc (NasdaqNM:QCOM - news). It provides a clearer, sharper signal than conventional cell phones, and was introduced in Japan earlier this year by DDI Corp , the nation's second-largest mobile phone service provider. Kyocera owns 25 percent of DDI. Nishiguchi said strong sales of cdmaOne phones will make up for stagnant worldwide sales of Iridium phones. Kyocera owns a 10 percent stake in Nippon Iridium, the local unit of satellite telecommunications company Iridium World Communications Ltd (NasdaqSC:IRID - news), which filed for bankruptcy court protection in August. ''Our sales target for Iridium phone for the current year will be significantly lower than our May forecast of 19 billion yen due to the parent company's trouble,'' Nishiguchi said, without offering a revised forecast. But he added his company would not be much affected by Iridium's financial problems and said Kyocera will continue ''to promote Iridium products mainly for the use of small planes, helicopters, and ships, not for the use of international business executives.'' ''The sales-to-pretax profit ratio for the Kyocera group for 1999/2000 will be rise to 10 percent from previous year's 8.5 percent,'' Nishiguchi also said, adding consolidated return on equity will be ''around 6 percent this fiscal year and 9 percent next year.'' He declined to comment on merger talks between its telecoms affiliate DDI and IDO Corp, a cell phone unit of Toyota Motor Corp . KDD, Japan's largest international phone service provider, has also been rumoured to be part of what may eventually be a three-way merger, creating a powerful rival to Nippon Telegraph and Telephone Corp (9432.T), Japan's former domestic phone service monopoly.