Reuters
UPDATE - Ricoh posts record profit but sees growth slowing
Thursday May 1, 5:16 am ET
By Edmund Klamann
(Adds executive, investor comments, background)
TOKYO, May 1 (Reuters) - Ricoh Co Ltd (Tokyo:7752.T - News), Japan's second-largest office machine maker, posted another record profit on Thursday and forecast more growth ahead as buyers snap up its high-speed copiers and colour printers despite a dull economy.
But the company, while turning in its ninth record result in a row, said growth was set to slow to its lowest pace in five years as its markets become saturated or draw in competitors.
"The drop in profit growth suggests it may be entering a phase of stable growth," said Shuichi Hida, portfolio manager at Plaza Asset Management.
"But I don't think we need to get too pessimistic about this outlook when you consider it is still outperforming negligible GDP growth at home and about three percent growth in GDP abroad."
Ricoh reported a consolidated net profit of 72.51 billion yen ($610 million) for the business year that ended on March 31, up 17.7 percent from the year before.
For the current business year, it projected a nine percent rise to 79 billion yen, the slowest rate of growth since 1998/99.
"There are several issues with the U.S. (economy) but as long as it doesn't get any worse, these (forecasts) will be fine," Ricoh Deputy President Tatsuo Hirakawa told a news conference.
The results came a day after Japan's Canon Inc (Tokyo:7751.T - News), the world's largest office machine maker, reported record quarterly profits for January-March and raised its targets for its fiscal year to December, projecting a fourth year of record earnings.
The two Japanese imaging companies, which compete with Xerox Corp (NYSE:XRX - News) for the top spot in the global copier market, have defied weakness in Japan's high-tech sector and a sluggish economy to rack up successive record profits.
FUTURE IN COLOUR
Analysts have lauded their focused management strategies, with Ricoh reaping healthy profits from the quick launch of advanced products such as multi-function printers, which double as facsimile machines, and colour networked printers.
Canon recently stepped up its challenge in colour laser printers, however, while high-speed digital copiers, one of Ricoh's strongholds, have now infiltrated most big offices, reducing the pace of earnings growth.
Signs of a slowdown have weighed on Ricoh's shares, which are down seven percent since the start of the year.
Canon stock, though, is up nearly six percent and the company recently overtook Sony Corp (Tokyo:6758.T - News) to boast the highest stock market value of any Japanese manufacturer outside the auto sector.
Ricoh recently reiterated its goal, set a year ago, of 2 trillion yen ($16.8 billion) in annual sales by 2004/05, tapping a shift to faster, higher-resolution colour printers and copiers.
"In the business year ahead, we'll be rolling out a lot of new colour products," Ricoh's Hirakawa said.
The company already saw a slowdown in operating profit growth to 3.1 percent in the year to March 31, the lowest in four years.
More brisk growth of 10 percent was forecast for this year, to 147 billion yen from 133.65 billion.
The profit results for last year were just short of the company's targets, last revised in February, of 73.2 billion yen in net profit and 138 billion yen in operating profit.
The 2003/04 forecasts were also slightly below analysts' consensus estimates of a 82 billion yen net profit and 153.9 billion yen operating profit, according to Reuters Research.
Revenues are seen rising four percent to 1.81 trillion yen this year, after last year's 3.9 percent rise to 1.74 trillion.
Thursday's results were released after the end of share trade in Tokyo. Ricoh shares ended 1.04 percent lower at 1,810 yen.
Canon shares fell 1.87 percent to 4,730 yen while the Nikkei average (^N225 - News) closed up 0.41 percent. (Additional reporting by Nathan Layne, Eriko Amaha) ($1=118.82 Yen)
UPDATE - Ricoh posts record profit but sees growth slowing
Thursday May 1, 5:16 am ET
By Edmund Klamann
(Adds executive, investor comments, background)
TOKYO, May 1 (Reuters) - Ricoh Co Ltd (Tokyo:7752.T - News), Japan's second-largest office machine maker, posted another record profit on Thursday and forecast more growth ahead as buyers snap up its high-speed copiers and colour printers despite a dull economy.
But the company, while turning in its ninth record result in a row, said growth was set to slow to its lowest pace in five years as its markets become saturated or draw in competitors.
"The drop in profit growth suggests it may be entering a phase of stable growth," said Shuichi Hida, portfolio manager at Plaza Asset Management.
"But I don't think we need to get too pessimistic about this outlook when you consider it is still outperforming negligible GDP growth at home and about three percent growth in GDP abroad."
Ricoh reported a consolidated net profit of 72.51 billion yen ($610 million) for the business year that ended on March 31, up 17.7 percent from the year before.
For the current business year, it projected a nine percent rise to 79 billion yen, the slowest rate of growth since 1998/99.
"There are several issues with the U.S. (economy) but as long as it doesn't get any worse, these (forecasts) will be fine," Ricoh Deputy President Tatsuo Hirakawa told a news conference.
The results came a day after Japan's Canon Inc (Tokyo:7751.T - News), the world's largest office machine maker, reported record quarterly profits for January-March and raised its targets for its fiscal year to December, projecting a fourth year of record earnings.
The two Japanese imaging companies, which compete with Xerox Corp (NYSE:XRX - News) for the top spot in the global copier market, have defied weakness in Japan's high-tech sector and a sluggish economy to rack up successive record profits.
FUTURE IN COLOUR
Analysts have lauded their focused management strategies, with Ricoh reaping healthy profits from the quick launch of advanced products such as multi-function printers, which double as facsimile machines, and colour networked printers.
Canon recently stepped up its challenge in colour laser printers, however, while high-speed digital copiers, one of Ricoh's strongholds, have now infiltrated most big offices, reducing the pace of earnings growth.
Signs of a slowdown have weighed on Ricoh's shares, which are down seven percent since the start of the year.
Canon stock, though, is up nearly six percent and the company recently overtook Sony Corp (Tokyo:6758.T - News) to boast the highest stock market value of any Japanese manufacturer outside the auto sector.
Ricoh recently reiterated its goal, set a year ago, of 2 trillion yen ($16.8 billion) in annual sales by 2004/05, tapping a shift to faster, higher-resolution colour printers and copiers.
"In the business year ahead, we'll be rolling out a lot of new colour products," Ricoh's Hirakawa said.
The company already saw a slowdown in operating profit growth to 3.1 percent in the year to March 31, the lowest in four years.
More brisk growth of 10 percent was forecast for this year, to 147 billion yen from 133.65 billion.
The profit results for last year were just short of the company's targets, last revised in February, of 73.2 billion yen in net profit and 138 billion yen in operating profit.
The 2003/04 forecasts were also slightly below analysts' consensus estimates of a 82 billion yen net profit and 153.9 billion yen operating profit, according to Reuters Research.
Revenues are seen rising four percent to 1.81 trillion yen this year, after last year's 3.9 percent rise to 1.74 trillion.
Thursday's results were released after the end of share trade in Tokyo. Ricoh shares ended 1.04 percent lower at 1,810 yen.
Canon shares fell 1.87 percent to 4,730 yen while the Nikkei average (^N225 - News) closed up 0.41 percent. (Additional reporting by Nathan Layne, Eriko Amaha) ($1=118.82 Yen)
Original Post