UPDATE 1-Nikon cuts outlook on Thai floods, yen strength

Fri Nov 4, 2011 9:07am GMT

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* Opearating profit forecast cut 22 pct to 67 bln yen

* Thai floods to drag down operating profit by 25 bln yen

* Thai plant to restart in Jan, at full volumes in March (Adds details, background)

By Mayumi Negishi

TOKYO, Nov 4 (Reuters) - Japan's Nikon Corp cut its annual operating profit forecast by 22 percent to below market expectations, hit by flooding at a key Thai camera factory that has quashed hopes of record annual sales, as well as by strength in the yen.

Thailand's worst floods in 50 years have submerged camera-making equipment, and are set to drag down profits by 25 billion yen ($320 million) despite plans to begin production at other sites in December to try to meet year-end demand.

Nikon said it would not be able to begin operations at the flooded Thai plant until January, adding that the factory would not return to normal production volumes until March.

Nikon, which competes with market leader Canon Inc and Sony Corp in digital cameras, said on Friday it now expects to earn an operating profit of 67 billion yen ($859 million) in the year to March.

That fell short of a market consensus estimate of 81 billion yen from 9 analysts polled by Thomson Reuters I/B/E/S.

Six-month operating profit quadrupled to 61.1 billion yen on record sales of cameras, which offset the impact of a Japanese currency near all-time highs.

It cut its annual unit sales forecast for interchangeable lens cameras by 13 percent to 4.7 million units, although its forecast for digital compact camera sales was nudged higher to 16 million units from 15.5 million units.

The company, which also competes against ASML of the Netherlands in lithography machines, cut its annual chip stepper sales target to 58 new chip stepper sales from 60 units, and said it now expects to sell 22 of its cutting edge immersion steppers in the year to March, instead of 26.

It lifted its LCD stepper target to 85 units from 82 forecast in August, on solid demand for equipment used to make smartphone and tablet PC screens.

($1 = 77.980 Japanese Yen) (Additional reporting by Reiji Murai; Editing by Edwina Gibbs)

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