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Parts makers' profits seen plateauing amid smartphone slowdown

OSAKA -- Earnings at five of six major Japanese electronic components manufacturers are expected to fall in the fiscal year ending March 2017 amid slumping smartphone sales and a significantly stronger yen.

Murata Manufacturing projects net profit to drop 13% to 178 billion yen ($1.63 billion) -- the first decline in five years. Sales growth in the communications business, which accounts for about 60% of total sales, is seen decelerating sharply from 29% to 2%. The slowing expansion of the smartphone market and Murata's shrinking share of the communications module market will likely cut into factory operating rates, pushing up fixed costs. Growing depreciation expenses and research and development spending will also drag on profits.

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