Nikon Corp., a Japanese maker of cameras and chip-manufacturing equipment, will revise its foreign exchange estimates for the dollar and euro, President Makoto Kimura said.
The company will determine the new assumptions by the time it reports April-June earnings, Kimura said in an interview today in Tokyo. “The first-quarter results may beat our projection but we can’t be optimistic because of currency fluctuations.”
The yen has gained about 19 percent against the euro and 5 percent against the dollar this year. Nikon, which earned more than 80 percent of its revenue outside Japan in the 12 months ended March 31, is using currency hedging and increasing overseas procurement of parts to become less vulnerable to fluctuations in exchange rates, Kimura said.
The Tokyo-based camera maker assumes a yen exchange rate of 90 yen to the dollar and 120 yen to the euro for the fiscal year to March 2011, it said May 11. The yen traded at 88.36 to the dollar and 111.82 to the euro at 12:45 p.m. Tokyo time. A stronger yen erodes the value of overseas earnings at a Japanese company when repatriated.
Nikon rose 3.8 percent to 1,607 yen as of 1:13 p.m. on the Tokyo Stock Exchange today. The benchmark Nikkei 225 Stock Average rose 2.5 percent.
Nikon loses about 700 million yen ($7.9 million) and 900 million yen of annual operating profit for every 1 yen weakening in the value of the dollar and euro respectively, according to the company.
The company is scheduled to announce its quarterly earnings on Aug. 5.