DoCoMo’s 1Q Profits Slip 13%

NTT DoCoMo released their first quarter earnings for fiscal year ending March 31, 2005 yesterday. Net income fell to 170.4 billion yen, or $1.53 billion yen, in the three months that ended June 30, from 196.8 billion yen a year earlier. Sales fell 2.5 percent, to 1.22 trillion yen. Despite adding 1.5 million new 3G subscribers they announced a 13% drop in profits over the same period last year. “Our subscriber growth is solid,” Masayuki Hirata, DoCoMo’s senior executive vice president, said at a news conference, “but many of our current initiatives are essentially price cuts, and the migration of customers to FOMA means related costs are increasing.” According to the figures, overall revenue per subscriber dropped from 8,060 yen to 7,400 yen.

The company did not alter its full year targets for net income and sales. DoCoMo estimated this May that it would report a profit of 751 billion yen for the year to March 31, 2005 on sales of 4.9 trillion yen. DoCoMo’s shares lost 1,000 yen in Tokyo trading Friday, closing at 194,000 yen. The stock has fallen more than 20 percent this year.

“DoCoMo has failed to maintain its customer base, and that’s the heart and soul of the company’s profit,” said Kazunori Ohtomo, a fund manager at STB Asset Management in Tokyo.

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