Japanese Tech Stock Weekly Summary (Apr. 27 - May 3, 2009)

The following is excerpted from IRG's weekly stock report:

• • •

Internet

• Yahoo Japan Corp. (YHOO), the operator of Japan’s most- visited Internet portal said full-year net income rose 19 percent to 74.7 billion yen (US$756.8 million), with a 1.4 percent rise in sales. The company expects first-quarter profit of between 19 billion yen (US$192.5 million) and 20.1 billion yen (US$203.6 million).

Media, Entertainment and Gaming

• Toymaker Tomy Co. announced full-year net income of 1.35 billion yen (US$13.7 million). This beats its outlook by 23 percent, due to greater-than-expected toy sales and lower administration costs.
• The operator of Tokyo’s Disney (DIS) theme parks, Oriental Land Co., said in a preliminary earnings statement full-year net income totaled 18.1 billion yen (US$183.4 million), missing its forecast by 13 percent. Oriental Land increased its second-half dividend to 40 yen (US$0.40) from 35 yen (US$0.35). The company will retire 4.42 percent of its shares on May 12.

Wireless/Mobile

• Japan’s largest mobile-phone operator NTT DoCoMo Inc. (DCM) said its net profit plunged in the fiscal fourth quarter on declining revenue from mobile phone handsets and sales promotion costs for new models. The net profit at Japan's top mobile phone carrier by subscriber numbers fell to 34.2 billion yen (US$346.5 million) in the January-March quarter from 114.7 billion yen (US$1.2 billion) a year earlier. Operating profit for the same period fell to 84.2 billion yen (US$853 million) from 183.3 billion yen (US$1.86 billion), while revenue fell to 1.07 trillion yen (US$10.8 billion) from 1.190 trillion yen (US$12.1 billion). For the fiscal year ended March, the company posted a 3.9% decline in net profit to 471.84 billion yen (US$4.8 billion), worse than the 499.5 billion yen (US$5.1 billion) net profit consensus forecast of 16 analysts compiled by Thomson Reuters' data arm Thomson Financial. Operating profit rose 2.8% to 830.96 billion yen (US$8.4 billion), while revenue fell 5.6% to 4.45 trillion yen (US$45.1 billion). For the current fiscal year through March 2010, DoCoMo forecasts an operating profit of 830 billion yen (US$8.4 billion) on revenue of 4.38 trillion yen (US$44.4 billion). DoCoMo plans to slash minimum data charges on some plans to 490 yen per month from 1,029 yen starting May 1 to bolster demand for data services as revenue from voice traffic slumps. The cheaper tariffs will trim operating profit by 40 billion yen this year, the company said.
• Japan’s third-largest mobile-phone company, Softbank Corp. (SFTBF.PK) announced that it plans to double its dividend this fiscal year and reduce debt. The dividend payout will increase to 5 yen per share (US$0.05) in the year ending March 31, 2010, from 2.5 yen (US$0.025). The company also said it will eliminate its 1.94 trillion yen (US$19.6 billion) in net interest-bearing debt, or obligations minus cash and equivalents, by March 2015 to reduce interest payments. Softbank kept its October forecast for operating profit to rise 17 percent this fiscal year after attracting more clients than its two bigger competitors for 22 months.

Hardware

• Pioneer Corp. (PNCOF.PK), a maker of car-navigation systems and electronics products, said it will receive 2.5 billion yen (US$26 million) of capital from business partner Honda Motor Co. (HMC) in the first of several fund-raising steps by the electronics maker to develop new car-electronics products finance. Under a medium-term business plan, Pioneer said it will need to raise about 40 billion yen (US$405.2 million). Pioneer is also preparing to apply for a government cash injection under newly approved measures in Japan's economic-stimulus program. With losses mounting, Pioneer has decided to exit the flat-panel television business and concentrate on electronics for the auto industry. The company will eliminate 9,800 jobs and take a 47 billion yen (US$476.1 million) charge this fiscal year for the reductions.
• BT Japan Corporation announced that it has signed an original equipment manufacturer (OEM) agreement with Hitachi Communication Technologies, Ltd. (HIT) (Hitachi Com), a wholly owned subsidiary of Hitachi, Ltd. that manufactures, sells and supports mission-critical trading systems in Japan. As a part of the agreement, Hitachi Com will act as an OEM for BT's trading systems portfolio in Japan, that includes BT's trading systems equipment and its applications, as designed by BT. The system portfolio of products to be sold by Hitachi will be rebranded and customized under the Hitachi logo and will be sold beginning in July 2009.
• Fujitsu Ltd. (FJTSY.PK), Japan’s biggest computer-services provider, forecast it will return to profit this fiscal year on narrowing losses in its chip business. President Kuniaki Nozoe is selling the company’s money-losing hard-disk-drive business to Toshiba Corp for about 30 billion yen (US$303.9 million) to focus on chip and software operations. Fujitsu also plans to outsource production of system LSI chips measuring 40 nanometers to Taiwan Semiconductor Manufacturing Co. to cut spending and help return the chip unit to profit next year. Net income will probably be 20 billion yen (US$202 million) in the 12 months ending March 31, 2010, from a deficit of 112.4 billion yen (US$1.1 billion) a year earlier. Losses at the semiconductor unit will narrow to 15 billion yen (US$152 million) in the period from 60 billion yen (US$607.8 million). Fujitsu is also considering joint development of 28-nanometer devices with the Hsinchu, a Taiwan-based company.

Software

• CSK Holdings Corp., a Japanese computer services company, widened its loss estimates to 161 billion yen (US$1.6 billion) from 104 billion yen (US$1 billion) for the year ended March because of charges on asset sales and inventory values, and write downs of tax assets. It also widened its operating loss estimate to 123 billion yen (US$1.2 billion) from 102 billion yen (US$1.0 billion).