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DoCoMo profit plunges 95 percent
TOKYO, Japan (CNN) -- NTT DoCoMo, the world's largest cell-phone company, said Thursday its net profit fell 95.3 percent for the first six months of the business year. The company also slashed its profit forecast for the full year, which runs through March. DoCoMo, which means "Anywhere" in Japanese, edged into the black with a profit of 4.17 billion yen ($34.3 million) for the April-September period. That is down substantially from the 89.2 billion yen profit it posted the same time last year. Total sales rose 1.9 percent over last year, to 2.38 trillion yen ($19.6 billion) for the first six months. Forecasts slashedDoCoMo forecast a full-year profit of 182 billion yen, down from its initial forecast of a 511 billion yen profit. It also slashed its estimate for how many third-generation, or "3G," customers it will sign by the end of the business year, to 320,000, not the 1.4 million it initially foresaw. The company cut its capital expenditure budget by 7 percent, to 891 billion yen. Analysts had expected a large fall in profit after the company in October took a 573 billion yen ($4.7 billion) writedown to account for "significant drops" in the value of its stakes in overseas cell phone operators. (Full story) That was the latest in a string of hits to reflect depreciation in its holdings in companies such as AT&T Wireless and KPN Mobile. DoCoMo will reportedly cut the pay of its directors, including President Keiji Tachikawa, by 10 to 20 percent for several months to reflect responsibility for the writedowns. Partner plan hurting companyDoCoMo spent 1.9 trillion yen to buy stakes in international cell-phone carriers, with an eye to promoting its i-mode and ultimately its 3G service around the world. But the tactic has hurt the company after the tech and telecom bubble burst. The company said earlier this week its French partner, Bouygues Telecom, will start offering its i-mode service on November 15, bringing the number of countries with i-mode to six. (Full story) DoCoMo has 35 million i-mode subscribers in Japan, where its total subscriber base of 42.2 million customers gives it 58.5 percent of the market. DoCoMo shares closed level on Thursday at 241,000 yen ahead of the earnings figures, which came out after the close. The benchmark Nikkei average fell 0.37 percent to 8,920.44.
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