UPDATE 2-Ricoh Q1 profit hits record, ups 03/04 forecasts
7/30/2003 4:50:59 AM
By Edwina Gibbs
TOKYO, July 30 (Reuters) - Ricoh Co Ltd (JP:7752) , Japan's second-largest office machine maker, on Wednesday posted a record quarterly net profit, spurred higher by cost cuts and strong sales of its copiers and printers.
On track to notch up its 10th straight year of record results, the blue-chip imaging company also boosted its estimates for this business year.
"The biggest contribution is from cost cuts -- we are better at generating profits. We've also had a bit of help from favourable exchange rates and sales have basically been strong," Deputy President Tatsuo Hirakawa told a news conference.
Consolidated net profit for the quarter ended June 30 rose 14.5 percent from a year ago to 22.4 billion yen ($187 million) -- the highest level since the company formally began calculating quarterly numbers nine years ago.
Sales were up 2.1 percent at 437 billion yen although the increase would have been a milder 0.9 percent without the benefit of a weaker yen against the euro, it said.
With Canon Inc (JP:7751) , the world's largest office machine maker, Ricoh has defied weakness in Japan's high-tech sector and a sluggish economy to rack up successive record profits.
It now estimates net earnings for the full year to March 31 to climb 17 percent to 85 billion yen compared with its May estimate of a 79 billion yen profit.
The move was in line with expectations after a newspaper reported earlier this month that the upward revision was likely.
The company also projected a full-year contribution from cost cuts, including the recyling of some parts in new products and a shorter product development time, of 10 billion yen compared with its initial estimate of four billion yen.
Ricoh had 1.74 trillion yen in sales in the last business year and aims to boost that to two trillion yen by 2004/05, tapping a shift to faster, higher-resolution colour printers and copiers.
Prior to the announcement, Ricoh's shares ended down 1.2 percent at 2,060 yen versus a fall of 2.05 percent on the Nikkei (65599W10) share average.
Ricoh's stock has edged up six percent in the calendar year to date, hit earlier in the year by concerns that the pace of growth was slowing. By comparison, Canon, which is riding high on the boom for digital cameras, has jumped 27 percent over the same period to 5,690 yen. ($1=119.84 yen)
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