KYOCERA Announces Consolidated Financial Results for Nine Months Ended December 31, 2009
KYOTO, Japan — January 28, 2010 — Kyocera Corporation (NYSE:KYO)(TOKYO:6971) today announced its consolidated financial results for the nine months ended December 31, 2009.
Overview of Consolidated Financial Results
Kyocera’s Fiscal Year 2010 began April 1, 2009, and will conclude March 31, 2010. During the three months ended December 31, 2009 (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. As a result, consolidated net sales for these nine months decreased by 14.8% compared with the same period of the previous fiscal year, to JPY768,920 (USD8,358) million.
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 JPY38,013 (USD413) million, due primarily to decreased sales. Income before income taxes decreased by 60.3%, to JPY32,739 (USD356) 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 JPY19,987 (USD217) million on its investment in WILLCOM Inc., an affiliate accounted for by the equity method. Net income attributable to shareholders of Kyocera Corporation decreased by 67.4% compared with the same period of the previous fiscal year, to JPY18,481 (USD201) million.
Exchange rates averaged JPY94 to the U.S. dollar and JPY133 to the Euro, marking appreciation of JPY9 (approximately 9%) and JPY18 (approximately 12%), respectively. As a result, net sales and income before income taxes (after full translation into yen) were, for calculation purposes, reduced by approximately JPY48,500 (USD527) million and JPY13,500 (USD147) million, respectively.
In the components business, sales decreased by 17.9%, to JPY393,075 (USD4,273) million; and operating profit decreased by 46.7%, to JPY25,304 (USD275) million.
In the equipment business, sales decreased by 12.5%, to JPY302,068 (USD3,283) million; while operating profit increased by 110.4%, to JPY8,298 (USD90) 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 JPY89,753 (USD976) 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 JPY3,907 (USD42) 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 JPY10.6 billion (USD115 million).
Outlook and Future Prospects
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 by 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.
In light of the results for these nine months and the outlook for the fourth quarter, Kyocera has made the following upward revisions to the consolidated financial forecasts announced in October 2009 for the year ending March 31, 2010.
1. Net income attributable to shareholders of Kyocera Corporation is calculated in the same manner as net income was for the year ended March 31, 2009..
2. Forecast of diluted earnings per share attributable to shareholders of Kyocera Corporation announced on January 28, 2010 is computed based on the diluted average number of shares outstanding during the nine months ended December 31, 2009.
3. The forecast of diluted earnings per share attributable to shareholders of Kyocera Corporation announced previously was computed based on the diluted average number of shares outstanding during the six months ended September 30, 2009.
4. On September 24, 2009, WILLCOM, Inc., applied for Alternative Dispute Resolution (ADR), and received acceptance for the ADR procedure. At December 31, 2009, WILLCOM’s business revitalization plan continues to be under discussion and has not been resolved. The result of the resolution may affect the valuation of Kyocera’s trade receivables from WILLCOM, Inc. and may have a material effect on Kyocera’s consolidated results of operations and financial position, which has not yet been reflected in the consolidated financial forecast set forth above. At December 31, 2009, Kyocera’s trade receivables from WILLCOM, Inc. were JPY15,350 (USD167) million.
Except for historical information contained herein, the matters set forth in this press release are forward-looking statements that involve risks and uncertainties including, but not limited to, product demand, competition, regulatory approvals, the effect of economic conditions and technological difficulties, and other risks detailed in the Company's filings with the U.S. Securities and Exchange Commission.
Complete details of Kyocera’s financial results for the nine months ended December 31, 2009 are available at: http://global.kyocera.com/ir/financial/f_results.html
Kyocera Corporation (NYSE:KYO)(TOKYO:6971)(http://global.kyocera.com), the parent and global headquarters of the Kyocera Group, was founded in 1959 as a producer of fine ceramics (also known as "advanced ceramics"). By combining these engineered materials with metals and plastics, and integrating them with other technologies, Kyocera has become a leading supplier of solar power generating systems, telecommunications equipment, electronic components, laser printers, copiers, semiconductor packages, cutting tools and industrial ceramics. During the year ended March 31, 2009, the company’s net sales totaled JPY1.13 trillion (approximately USD11.5 billion). The company, which marked its 50th anniversary and the 40th anniversary of its U.S. operations in 2009, was ranked #418 on Forbes magazine’s 2009 "Global 2000" listing of the world’s largest publicly traded corporations.
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CONTACT: KYOCERA Corporation (Japan)
Judah Reynolds, +81-(0)75-604-3416