OSAKA -- Kyocera on Thursday lowered its consolidated net profit forecast for the year ending March 2016, expecting sluggish demand for smartphone parts and solar cells.
The Japanese electronic parts maker now sees group profit at 85 billion yen ($698 million), down 27% on the year and a reversal from the previously projected 4% increase to 120 billion yen. The figure would mark the first profit decline in three fiscal years.
Sales were revised to remain nearly flat at 1.53 trillion yen, down 70 billion yen from the old forecast. The semiconductor components segment got a 23 billion yen downgrade, with such parts as ceramic packages struggling.
"Chinese-made smartphones are becoming less popular," President Goro Yamaguchi said.
Orders for industrial solar cells have been sluggish, hit by lower purchasing prices for renewable energy in Japan. Solar panel demand has been further dampened by power companies' refusal to take more renewable energy into their grids.
Operating profit would rise 18% to 110 billion yen, down 50 billion yen from the earlier forecast. The company cut its profit projection for the electronic devices segment from 43 billion yen to 15 billion yen after considering outlays related to structural reforms for the second half.
The information equipment segment, which includes photocopiers, is expected to see a 16% profit decline rather than the previously projected increase, owing to the Japanese currency's weakness against the euro.
But automotive-related offerings, including camera components, drew strong demand in the first half. And solar cells sold briskly in the U.S., according to Yamaguchi.
For the six months ended September, consolidated sales edged up 1% on the year to 722 billion yen, Kyocera said. Net profit grew 16% to 50.7 billion yen.
The company plans to roughly double the foreign contribution to solar cell sales to 20% this year.