TOKYO, Apr 14, 2008 (AsiaPulse via COMTEX) -- Ricoh is expected to report a pretax profit of 180 billion yen (US$1.8 billion)
The year ended March 31, falling short of the target it had downgraded in January.
The number represents a 3 per cent increase from the year-earlier figure. The company's earnings were hit by the yen's rise against the dollar and sluggish sales of copiers in the U.S.
Sales likely rose 6 per cent to 2.2 trillion yen, about 50 billion yen below its earlier projection. Its acquisition of the digital commercial printer business from U.S. firm IBM Corp. added about 60 billion yen in sales, but this was not enough to offset the overall slowdown. Ricoh's domestic sales languished, particularly to smaller businesses.
Because of the U.S. subprime mortgage problem, customers in the financial services, real estate and construction industries were reluctant to upgrade office equipment. As a result, Ricoh's operations in the Americas incurred a 100 million yen operating loss for the October-December quarter, and they may have remained in the red for the January-March period.
Also, the yen's sharp appreciation eroded the value of its dollar-based accounts receivable.
Ricoh initially projected that sales would increase 9 per cent to 2.25 trillion yen and pretax profit will jump 10 per cent to 192 billion yen. But due to the yen's advance and sluggish U.S. sales, these estimates were lowered in January.
With tough conditions expected to continue, the firm anticipates tepid pretax profit growth for the fiscal year ending March 2009.
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