Japanese telco lowers full-year profit outlook on higher fixed-asset writeoff.
KDDI Corp. said Monday that its net profit for the October-December quarter nearly doubled from a year earlier, powered by the popularity of smartphones, including Apple Inc.’s new iPhone 5.
The upbeat earnings performance came after Apple last week disappointed investors by announcing a flat profit for the holiday quarter, despite selling nearly twice as many iPhones and iPads.
But KDDI, Japan’s second-largest mobile phone service operator by subscriber after NTT DoCoMo Inc., still got a lift from the iPhone 5 and other smartphone models. KDDI enjoyed a solid net gain of 707,000 “au” mobile phone services subscribers during the quarter, bringing its total as of Dec. 31 to 36.817 million, up 7.3% on year.
During the latest reporting quarter, KDDI generated a net profit of 100.49 billion yen ($1.1 billion), up 85% from Y54.22 billion in the same period a year earlier.
Revenue gained 7.5% to Y969.98 billion from Y902.13 billion, while operating profit soared 39.9% to Y164.33 billion from Y117.48 billion.
For this fiscal year ending March, however, the company lowered its net profit outlook to Y235 billion from Y250 billion, due to a higher-than-expected writeoff of its fixed assets, including telecom service equipment. The revised figure represents a 1.5% fall from the year-earlier result.
But the company expects its mainline business to remain robust, revising upward its revenue outlook to Y3.630 trillion from Y3.580 trillion, while raising its operating profit outlook to Y505 billion from Y500 billion.
It raised its full-year smartphone handset sales target to 8.45 million units from 8 million in its previous outlook.
Separately, the company said it will conduct a two-for-one stock split effective April 1 to improve the stock’s liquidity and broaden the range of its investors. The stock split will bring the number of KDDI shares outstanding to 896.96 million from the current 448.48 million.
KDDI’s earnings are based on Japanese accounting standards.