Aug. 6 (Bloomberg) -- Olympus Corp., the world’s biggest maker of endoscopes, raised its earnings forecast for the fiscal first half, citing cost reductions and management of inventory.

Net income in the six months ending Sept. 30 will probably be 36 billion yen ($378 million), 9 percent higher than its earlier projection of 33 billion yen, the Tokyo-based company said in a statement.

Progress in cost reduction and cutting inventories at the imaging division are helping the company to improve profitability, Olympus said. The maker of digital cameras and microscopes predicts its shipment of cameras will rise 3 percent in the 12 months ending March 2010, after dropping 12 percent in the previous year, it said in May. The company cited continued uncertainty for leaving its annual targets unchanged.

First-half operating profit, or sales minus the cost of goods sold and administrative expenses, will probably be 19 billion yen, 27 percent higher than the 15 billion yen projected in May.

Olympus rose 2.1 percent to close at 2,665 yen in Tokyo trading before the earnings announcement, extending its gain this year to 52 percent. Japan’s benchmark Nikkei 225 rose 1.3 percent.

Net income dropped 72 percent 1.8 billion yen in the three months ended June 30, from a year earlier, the company said. That compares with shortfalls of 1.3 billion yen and 1.1 billion yen in two analyst estimates compiled by Bloomberg.

Sales declined 19 percent to 205 billion yen in the quarter, mainly due to the 43 percent drop in revenue at its imaging business. Operating profit slid 35 percent to 11.4 billion yen.

To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net.

Last Updated: August 6, 2009 03:30 EDT