Japan's Konica Minolta Holdings Inc on Friday cut its operating profit forecast for the next business year by 38 percent, reflecting slower-than-expected demand for copiers and sliding digital camera prices. Konica Minolta, the world's number four copier maker after Canon Inc, and Ricoh Co Ltd , said it now expected a group operating profit of 90 billion yen ($846.4 million) in 2005/06, against its prior forecast for a profit of 145 billion yen.
The Tokyo-based company also lowered its sales outlook for the next financial year to 1.13 trillion yen from 1.23 trillion yen. Konica Minolta first announced the 2005/06 targets for both profit and sales in March last year.
Last week, Konica Minolta lowered its operating profit forecast for the current business year to March 31 by 13 percent to 70 billion yen, citing delays in launching new copiers and tumbling prices of compact digital cameras. It lowered its group sales estimate for 2004/05 by 3.6 percent to 1.06 trillion yen.
For the year to March 2007, the company cut its operating profit forecast to 105 billion yen, down from its previous forecast of 160 billion yen, on sales of 1.21 trillion yen. It had previously forecast sales of 1.33 trillion yen for 2006/07. A major factor behind the downward revision was a delay in the introduction of new multi-function peripherals (MFPs), office machines that combine the functions of a copier, printer, fax and scanner. The delays led to a loss in potential sales.
The company, created in August 2003 through the merger of precision equipment companies Konica Corp and Minolta Co, recorded an operating profit of 73 billion yen in the previous business year on revenue of 1.124 trillion yen.
Its earnings have also been hurt by a bigger-than-expected slide in prices of compact digital cameras, pressuring margins and overshadowing strong sales of the "Alpha-7 Digital", its first digital single lens reflex (SLR) model launched in November.
Shares in Konica Minolta closed up 0.09 percent at 1,131 yen on Friday, in line with a 0.13 percent rise in the Nikkei share average.
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