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Japanese Telecommunications Giant Reports Worst Loss Ever - 2002-05-17

A Japanese telecommunications giant reports its worst loss ever, while a midsize auto maker posts a strong profit.

Nippon Telegraph and Telephone, Japan's largest telecommunications carrier, posted a record loss for the past fiscal year. The company lost $6.4 billion. That is the worst loss ever for a Japanese company outside of the financial sector.

The news was widely expected after NTT issued a profit warning last month. The telecom giant blames its poor numbers on restructuring costs and overseas investments that have fared badly.

NTT president Junichiro Miyazu says "NTT slashed domestic calling prices and that business conditions are bad."

The company also unveiled a management shakeup. Senior Executive Vice President Norio Wada takes the helm in June.

Nippon Telegraph and Telephone's rival, KDDI, reports a steep fall in profit for the last business year. Japan's second-largest telecommunications company saw net profit fall 40-percent, to $100 million. Heavy competition and a one-time charge for scrapping some outdated equipment caused the slump.

For the next year, KDDI expects profits to more than triple. It forecasts a strong performance by its mobile phone business, which recently launched what are called next generation services. It has attracted more than 300,000 subscribers with the new services.

Mazda, Japan's fifth-biggest auto maker, returned to profit in the most recent fiscal year and says it expects better results next year. Its earnings for the fiscal year ending in March totaled $69 million. It has just completed an aggressive two-year restructuring plan that included more than 2,000 lay-offs. Last year, the company booked a loss.

Mazda, which is one-third owned by Ford of the United States, says favorable exchange rates and cost cutting are behind its strong results. Two other Japanese car makers, Toyota and Mitsubishi, also reported strong profits earlier this week.