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Olympus Digital Camera Sales Slowing, But Expectations Rising

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*November 8, 2005 - *Olympus Corp. had a rougher fiscal first half than expected, with quarterly profit dropping 69 percent. Nonetheless the fourth-largest manufacturer of digital cameras anticipates a greater than expected rebound in the second half, with a yearly net income forecast going beyond the earlier 23 billion yen to 27 billion.

Quarterly operating profit has crept up 6.2 percent to 12.7 billion yen, and quarterly sales climbed 62 percent. That figure however was not positively influenced by sales of digital cameras; Olympus is in planning to cut 30 percent of the jobs in its camera unit workforce to reduce costs, and even though the net income forecast has improved for the company as a whole, Olympus expects to sell only 8.1 million digital cameras this year rather than its earlier expectation of 9.5 million. Sales of SLRs are expected to reach just 270,000 instead of 300,000. By the end of the fiscal year, Olympus hopes its digital camera unit can rebound from a loss of 6.72 billion yen to an operating profit of 2.72 billion yen.

"We can't expect growth in digital cameras as we saw in the past," said Hideo Yamada, an Olympus managing executive officer. "But with a better product mix and cost cuts, we aim to make the imaging business profitable in the second half."

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