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November 12, 2012 5:40 pm
Olympus, the Japanese optical-equipment maker that was caught in a $1.7bn accounting fraud a year ago, has reported its first quarterly profit since 2010 even as it gave up on a goal of ending losses at its digital camera division by next March.
The results and revised full-year forecasts, announced on Monday, highlighted the gap between Olympus’s struggling mass-market camera business and its specialised medical-devices arm, which dominates the lucrative global market for surgical endoscopes.
Olympus raised its sales and profit forecasts for medical devices but said it expected the camera operation to end the fiscal year to March with a loss of Y8bn, compared with its previous projection of a Y1bn profit.
In cameras, Olympus has been battered by the same headwinds that have pushed other Japanese consumer electronics makers into financial trouble – high manufacturing costs, fast-falling product prices and tough competition from rivals elsewhere in Asia.
According to analysts and its own executives, it compounded its problems by focusing on simple point-and-shoot cameras – the least profitable end of the market – while rivals such as Nikon and Canon developed higher-end gear.
Olympus cut its overall full-year forecast for operating profit – earnings before taxes, depreciation and one-off items – by 24 per cent to Y38bn. However, it raised its net profit forecast, from Y7bn to 8bn, to reflect gains from the sale of a telecoms unit in August.
Olympus’ net profit of Y12.5bn for the quarter to September was its first since October-December 2010, according to revised earnings statements submitted following the accounting fraud, in which Olympus was caught hiding two decades’ worth of investment losses.
In September, Sony agreed to buy a minority stake in Olympus for Y50bn – fresh capital that will help Olympus strengthen its balance sheet, which was weakened by asset write-offs related to the scandal.
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