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Strong Camera Sales Propel Nikon Profits

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August 8, 2005 – Net profit at Nikon for the first quarter ending June 30 jumped 351 percent over the same period last year, pushed by strong camera sales and sales of machinery used in integrated circuit manufacturing.

"Thanks to an upturn in sales of digital cameras, led by high-end SLR digital cameras and brisk sales of high-margin steppers, we posted stronger-than-expected profits for the first quarter," said Nikon chief financial officer, Ichiro Terato, at a news conference announcing the results.

Revenue in the first quarter rose 13.9 percent on strong sales of digital cameras. Sales of digital cameras rose 19 percent to 1.9 million units in the first quarter, driven by a near doubling of SLR sales, which jumped 43 percent. Profit at Nikon’s imaging division, which covers digital cameras, rose to 6 billion yen, up from 5.3 billion yen a year ago.

Nikon’s precision equipment segment, which manufactures steppers, optical lithographs used to manufacture integrated circuits, posted operating profit of 6 billion yen, overcoming a loss of 900 million yen a year earlier.

While other digital camera manufactures have resorted to lowering prices in order to drive sales, Nikon saw its digital camera prices fall by only 2 percent, far below the 10 percent drop seen across the industry, according to Mamoru Kajiwara, Nikon’s managing director.

Based on the gains in the first quarter, Nikon has raised its first-half and full year earnings forecasts for the year ending March 31, 2006. Nikon, the world’s number two manufacturer of DSLRs after Canon, sold 1.05 million SLRs in 2005. The company expects to increase overall sales this year to 7.6 million cameras, with SLR sales accounting for 1.6 million units.

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