Kyocera Releases 2010 Fiscal Nine-Month Financial Results
Kyocera Corp. recently announced its consolidated financial results for the nine months ended December 31, 2009. Consolidated net sales for these nine months decreased by 14.8%, compared with the same period of the previous fiscal year, to 768,920 million yen ($8,358 million). During the third quarter, demand for components showed recovery, exceeding the third quarter demand of the previous fiscal year. For the full nine months, however, sales decreased over the same period of the previous fiscal year, as first half demand for components, mobile phone handsets and information equipment remained below the levels of the previous year’s first half. In addition, the company’s revenue and profit were reduced by the appreciation of the yen against the euro and U.S. dollar.
In response to these economic challenges, Kyocera pursued lower cost structures and higher productivity throughout its worldwide operations. Despite these efforts, profit from operations for these nine months decreased by 43.5%, compared with the same period of the previous fiscal year, to 38,013 million yen (~ $413 million), due primarily to decreased sales. Income before income taxes decreased by 60.3%, to 32,739 million yen (~ $356 million), due to decreased profit from operations, plus an impact of a one-time loss in equity in losses of affiliates and unconsolidated subsidiaries as Kyocera recognized an impairment loss of 19,987 million yen (~ $217 million) on its investment in WILLCOM Inc., an affiliate accounted for by the equity method. Net income attributable to shareholders of Kyocera Corp. decreased by 67.4%, compared with the same period of the previous fiscal year, to 18,481 million yen (~ $201 million).
In the components business, sales decreased by 17.9%, to 393,075 million yen (~ $4,273 million), and operating profit decreased by 46.7% to 25,304 million yen (~ $275 million). In the equipment business, sales decreased by 12.5% to 302,068 million yen (~ $3,283 million), while operating profit increased by 110.4% to 8,298 million yen (~ $90 million).
The Others segment comprises various businesses, including information and communications technology (ICT) services and materials for electronic components. Total sales in this reporting segment decreased by 7.4%, compared with the same period of the prior year, to 89,753 million yen (~ $976 million), due to lower demand for materials used in electronic components and lower demand for ICT and telecommunications engineering services. Operating profit decreased by 74.4% to 3,907 million yen (~ $42 million), due to decreased sales and the absence of gains on sales of real estate recorded in the same period of the prior year, in the amount of approximately 10.6 billion yen (~ $115 million).
Demand for components showed a steady recovery trend over the nine-month period, led by rising production of digital consumer electronics beginning in the first quarter and coupled with a third quarter turnaround to production increases in the semiconductor and automotive industries. In addition, demand for solar energy products remained solid during this nine month period and is showing an upward trend, particularly in Japan.
During these nine months, Kyocera was able to achieve an improvement in profitability disproportionate to the recovery in sales, as a result of comprehensive efforts to reduce costs and improve productivity during the first three quarters. In the fourth quarter, Kyocera will strive for growth, despite uncertainty in the global economy, fluctuating exchange rates and other factors, by capitalizing on its aggregate power in markets relating to information and communication technology, environmental preservation technologies, and renewable energy products.
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