DoCoMo Q2 Net Profit Drops by 25%

TOKYO -(Dow Jones)- NTT DoCoMo said Friday its group net profit for the April-June quarter fell 25%, squeezed by an accounting change, increased expenses for selling handsets and the cost of expanding its mobile telephone network.

Japan's top mobile communication carrier said its group net profit declined to Y122.81 billion from Y163.51 billion. Group revenue slipped 2.9% to Y1.183 trillion from Y1.219 trillion.

The company left its previous earnings outlook unchanged for the fiscal year through March. It expects Y476 billion in group net profit and Y4.728 trillion in revenue.

NTT DoCoMo said the accounting change pushed down its group revenue by Y30.6 billion. In the same quarter a year earlier, the company recognized part of the expiring carry-over allowances for its subscribers as revenue.

Its operating costs went up as expenses linked to revenue from handset sales inflated and it built more base stations for its service network.

The company also said it will slash the basic monthly fee by half for a two-year family calling plan from Aug. 22, effectively matching the recently announced fee cut by its rival KDDI Corp.

NTT DoCoMo's earnings results are based on U.S. accounting standards.

-By Kazuhiro Shimamura, Dow Jones Newswires; 813-5255-2929; kazuhiro.shimamura@dowjones.com

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Posted to the site on 27th July 2007