Nippon Telegraph and Telephone (NTT), Japan's biggest phone company, posted a 24 percent rise in quarterly profit on gains at its mobile and system integrator units, and stood by its full-year outlook.
NTT, like rival KDDI, is struggling to improve its sluggish fixed-line operations, but its mobile phone unit NTT DoCoMo lifted its profits after it slashed incentives on handsets.
DoCoMo, Japan's top cellphone carrier, generates some 70 percent of the parent's operating profit.
NTT said its operating profit came to 372.06 billion yen ($3.43 billion) in the April-June quarter, up from 299.23 billion yen a year earlier. The figures are reported under U.S. accounting standards.
NTT's earnings were boosted by a 45 percent profit jump at DoCoMo as well as solid earnings at system integrator NTT Data.
NTT stuck to a group operating profit projection of 1.16 trillion yen for the year to March, lower than market expectations of 1.21 trillion yen in a poll of 15 analysts by Reuters Estimates.
Shares in NTT, one-third owned by the government, gained 21 percent in the three months ended June, outperforming a 4.1 percent rise in the Tokyo Stock Exchange's information and communications subindex.
Before the announcement, the stock closed up 1.3 percent at 564,000 yen, while the subindex ended up 1.5 percent.