Furukawa Electric Improves Profits for Telecom Company in 1Q

Furukawa Electric posted favorable operating profits for the telecommunication company, the energy & industrial products company and the electronics & automotive systems company in April-June 2006 from the same period of 2005. The profits increased for the telecom company when US subsidiary, OFS Fitel posted the operating profit for the first time since Furukawa Electric acquired OFS Fitel in 2001. Demand recovery for semiconductors and digital appliances contributed to the profit increase for the other 2 companies. On the other hand, the operating profit decreased by 400 million yen for the metals company and kept flat for the light metals company.The telecom company posted 39.8 billion yen of net sales and 2.6 billion yen of operating profit in April-June 2006, the sales increasing by 19.9% and the profit by 4.3 times from the same period of 2005. OFS Fitel could improve its operating section from 1.6 billion yen of deficit in April-June 2005 to even in the same period of 2006 when demand such for optical drop cable recovered in US market used for optical networks to household.The energy & industrial products company posted 65.5 billion yen of net sales and 1.8 billion yen of operating profit in April-June 2006, the sales increasing by 49.9% and the profit by 4.5 times from the same period of 2005. The electronics & automotive systems company posted 51.6 billion yen of net sales and 500 million yen of operating profit, the sales increasing by 24% and the profit by 66.7%.Furukawa Electric increased the net sales by 36.6% to 41.4 billion yen while decreased the operating profit by 36.4% to 700 million yen for the metals company in April-June 2006 from the same period of 2005. The profitability became worse when the firm could not pass the increasing material costs for copper ingot on the selling prices enough. The net sales increased by 10.2% to 60.3 billion yen but the operating profit kept flat at 3.8 billion yen for the light metals company. The firm could not pass the increasing fuel costs on the selling prices.