Japanese precision equipment maker Nikon said on Wednesday its quarterly profit fell 20.5 percent, dragged down by sluggish demand for chip-making equipment, and it kept its annual outlook below market consensus.
Nikon, the world's No.2 maker of chip steppers, is hurting as chip makers rein in capital spending amid an industry-wide slump and price falls, prompting it to lower its sales targets for the complex machines, used to print circuitry on silicon wafers.
But it said it would invest 35 billion yen ($323 million) over the next three years to boost output of cutting edge immersion steppers.
Also the world's No.5 digital camera maker, Nikon is fighting to extend sales of digital single lens reflex cameras amid fierce competition from rival Canon, and is battling price falls in compact cameras.
Amid fears of a global economic slowdown hurting both camera and chip equipment sales, Nikon kept its outlook for a 3.8 percent fall in operating profit to 130 billion yen ($1.20 billion) for the year to March 2009, while 18 analysts polled by Reuters Estimates predict an average 138 billion yen.
Nikon posted an operating profit of 28.72 billion yen for April-June, down from 36.13 billion yen in the same period a year earlier.
The results come as the No.1 stepper maker, Netherlands-based ASML, which has also warned of a tough year for stepper sales, makes inroads in Japan.
Nikon's net profit was 17.95 billion yen, down 23.4 percent, on sales of 237.87 billion yen, up 6.4 percent.
Prior to the results announcement shares of Nikon closed 4.3 percent higher at 3,050 yen, while the Tokyo stock market's electrical machinery subindex rose 4.1 percent.
Nikon shares have gained 10 percent since the start of the business year in April to Tuesday, compared with Canon's 5.7 percent rise and a 3.4 percent rise in the subindex.