NTT reports fall in second-quarter net income, but raises outlook on smartphone sales

9 Nov 2011

Japanese telecoms behemoth Nippon Telegraph & Telephone Corp (NTT) today released its preliminary results for its fiscal second quarter ended 30 September 2011, showing that net income declined 10% year-on-year due to a weak performance from mobile arm NTT DoCoMo and higher operating expenses. The carrier, Japan’s largest telecoms group by revenues and subscribers, also announced plans to cancel 8.66% (or roughly 125 million) of its shares effective 15 November, following which it plans to buy back up to 3.48%, or 44 million shares, for as much as JPY220 billion (USD2.82 billion) through to 31 March 2012, as part of efforts to return profits to shareholders.

NTT reported consolidated net profit of JPY143.37 billion for the three-month period under review, compared with a profit of JPY159.30 billion in the same period a year ago. DoCoMo last week reported that net profit for July-September dipped 16% year-on-year to JPY140.27 billion from JPY167.59 billion, as voice revenue continued to decline. Japan’s biggest mobile carrier by number of subscribers also reported a 1.6% gain in revenue to JPY1.066 trillion. NTT also booked higher operating expenses as a result of inclusion of South African technology services provider Dimension Data Holdings, which it acquired last year, in its group earnings. Group revenue grew 4.7% y-o-y to JPY2.617 trillion from JPY2.500 trillion, while operating profit fell 13% to JPY336.20 billion.

However, for the full year to 31 March 2012, NTT has raised its net profit outlook to JPY545 billion from JPY540 billion, and revised upwards its forecast for operating profit to JPY1.250 trillion from JPY1.240 trillion. The revision is based on strong anticipated demand for smartphones and data-based subscriptions. The revenue outlook of JPY10.540 trillion remained unaltered.