Oki Widens Loss Estimate on Overstated Accounts in Spain
The net loss will probably total 3 billion yen ($39 million) in the six months ending Sept. 30, compared with its earlier loss estimate of 2 billion yen, Tokyo-based Oki said in a statement today. The company also lowered its sales estimate for printers in Spain, it said.
Oki, with customers including International Business Machines Corp. (IBM), has said it intends to improve management and internal controls to prevent future overstatements. The company last month said the unit in Spain overstated accounts receivables, prompting the biggest one-day decline in shares in at least 37 years.
The Tokyo Stock Exchange said today that Oki will be removed from its watchlist for possible delisting, effective tomorrow. Oki was put on the list after reporting the accounting irregularities and was asked to submit a business improvement report, according to the statement.
The accumulated effect on Oki’s earnings over at least six years from the accounting irregularities totaled 30.8 billion yen, the company said earlier this week.
Oki kept its full-year profit estimate unchanged, as the company expects higher demand for its information and communication systems, including automated teller machines, to make up for lower-than-expected sales for its printers, it said.
Net income will probably total 11 billion yen for the year ending March, Oki said in May. That compares with the 9.1 billion yen average of four analysts’ estimates compiled by Bloomberg. Oki today raised its full-year sales estimate 1.6 percent to 447 billion yen.
First-quarter loss widened to 4.1 billion yen in the three months ended June 30 from a 3.1 billion yen loss a year earlier, the Tokyo-based company said in a statement today. Sales rose 8.7 percent to 91.1 billion yen.
Oki set aside money for potentially uncollectable accounts following the misconduct in the first quarter, it said. A stronger yen also eroded the company’s overseas earnings when repatriated, Oki said.
The stock fell 2.2 percent to 90 yen in Tokyo trading before the announcement, trimming its gain this year to 30 percent.
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