Kyocera Cites Stronger Yen for Lower Sales, Net Income in First Half

Kyocera The New Value FrontierKyocera Corporation of Kyoto, Japan, reported financial results for the six months of April 1 – September 30, 2016, with net sales declining by ¥69,334 million, or 9.6 percent, compared with the previous first half, to ¥653,243 million, with Kyocera stating that this was due mainly to the impact of the Japanese yen’s appreciation versus other currencies. Profit from operations for the first half decreased by ¥28,164 million, or 45.5 percent, to ¥33,785 million, compared with the previous first half. Net income decreased by ¥14,639 million, or 28.8 percent, to ¥36,153 million compared with the previous first half.

Information Equipment Group

Sales for the Information Equipment Group, which include printers, copier/MFPs, and related supplies and solutions, decreased due to the impact of the yen’s appreciation, according to Kyocera, while equipment sales volume remained unchanged from the previous first half. Operating profit increased compared with the previous first half, however, as a result of Kyocera’s efforts to reduce costs, including productivity improvements.

Fine Ceramic Parts Group

Sales in this segment “were on par” with the previous first half due to a decline in sales of components for smartphones which was more than enough to offset an increase in sales of automotive components. Operating profit decreased due mainly to the impact of a change in product mix.

Semiconductor Parts Group

Sales in this segment decreased compared with the previous first half, according to Kyocera, due to a decline in sales of organic substrates for communications infrastructure, which was more than enough to offset “firm demand” for ceramic packages for optical communications. Operating profit decreased due to the lack of profit from the sale of assets in the amount of approximately ¥12 billion, which was recorded in the previous first half, and was also affected by lower sales.

Applied Ceramic Products Group

Sales and operating profit in this segment decreased compared with the previous first half due primarily to a decline in sales in Kyocera’s solar-energy business, according to the firm, due to sales-price erosion, as well as to a decline in sales in the cutting-tool business reflecting the effect of the yen’s appreciation.

Electronic Device Group

Sales and operating profit in this segment decreased compared with the previous first half, due to sales-price erosion and the impact of the yen’s appreciation, which was “more than enough” to offset growth in demand for small-size capacitors and crystal components.

Telecommunications Equipment Group

Sales volume decreased compared with the previous first half due to a reduction in production ratio for low-end mobile phones for overseas markets, which was “more than enough” to offset growth in demand for distinctive mobile phones “with high durability and other unique features.” As a result, sales in this reporting segment decreased and an operating loss was recorded.

Financial Forecasts for the Year Ending March 31, 2017

For the three months ending on December 31, 2016 and thereafter, Kyocera says that although there are some uncertainties regarding the demand for smartphone components, sales for its the solar-energy business, principally for domestic industrial use, are expected to increase and, in addition, in the equipment business, sales expansion is expected as a result of launches of new products and “aggressive sales activity.”

Based on those expectations, Kyocera is maintaining its financial forecasts for sales and net income that it had announced on April 27, 2016, with net sales of up 2.7 percent, and net income down 22.1 percent, both versus the previous fiscal year.

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