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Japan-Update

Japan's NTT on track to beating operating profit guidance

Cloud and mobile businesses seen outperforming

TOKYO -- Nippon Telegraph & Telephone appears poised to surpass its outlook for full-year operating profit by about 30 billion yen ($267 million), topping an already record-high forecast on the strength of its cloud and mobile services.

The Japanese telecommunications group has forecast 1.59 trillion yen in operating profit for the year ending in March, up 3% from the previous financial year.

But the long-distance and international communications segment, overseen by NTT Communications and other affiliates, has performed better than anticipated. As companies turn to big data to help them streamline operations, NTT is seeing growth in its cloud and other services.

"It's perfectly possible for long distance and international communications to arrive above guidance," NTT President Hiroo Unoura said. The segment is seen contributing an additional 10 billion yen or so to operating profit.

NTT Docomo, the group's mobile carrier, earned 548.7 billion yen in operating profit during the April-September first half, apparently topping internal projections by roughly 20 billion yen. When presenting first-half results, Docomo retained the annual operating profit outlook calling for a 2% gain to 960 billion yen. But the carrier appears poised to beat that forecast by about 20 billion yen.

The affordable wireless plans rolled out in June curbed customer defections to low-price rivals. Costs borne by the mobile segment also came in lower than predicted.

In an effort to boost shareholder returns, NTT is repurchasing up to 30 million shares, or 150 billion yen worth of common stock, through March and plans to cancel most of its treasury stock.

(Nikkei)

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