UPDATE: NTT DoCoMo, Softbank Earnings Take Divergent Paths

NTT DoCoMo Inc. (9437.TO) and Softbank Corp. (9984.TO) Thursday reported fiscal first quarter results that contrasted each other, as DoCoMo saw its profit drop on shrinking per-user revenue while Softbank enjoyed gains on increased service fees and handset sales.

NTT DoCoMo, Japan's No. 1 cellphone carrier with more than 50 million subscriptions, posted a 15% decline in its net profit to Y147.38 billion from Y173.51 billion a year earlier.

By contrast, Softbank's net profit for the April-June quarter jumped 41% to Y27.38 billion from Y19.37 billion in the same period a year earlier. It was much better than a consensus projection for a Y11.2 billion profit compiled by data provider Thomson Reuters from a survey of 13 analysts.

Boosted by the popularity of Apple Inc.'s (AAPL) iPhone, which it sells in Japan, Softbank said its overall handset sales increased in the April-June quarter at a time when most carriers are selling fewer handsets.

Softbank said brisk handset sales and increased service fees boosted its mobile phone segment earnings in the April-June quarter, putting the No. 3 carrier in a better position to take on bigger rivals DoCoMo and KDDI Corp. (9433.TO).

Softbank's operating profit climbed 27% to a record Y108.29 billion from Y85.09 billion a year earlier, helped by a 36% growth in the core mobile communication operations to Y60.2 billion. Revenue for the same quarter rose 2.9% to Y666.33 billion from Y647.26 billion.

Although its average monthly per-user revenue of Y4,030 for the quarter was down 3.5% from a year earlier, it improved significantly from Y3,830 in the January-March quarter.

On the other hand, an NTT DoCoMo spokesman said falling revenues from phonecall charges weighed on earnings. The company's average revenue per user dropped 7.6% to Y5,440 from Y5,890 a year earlier.

Handset sales were weak at DoCoMo, falling 12% on year, but the spokesman said the sales decline was mostly canceled out by smaller sales-related costs.

DoCoMo's group revenue fell 7.3% to Y1.085 trillion from Y1.170 trillion, while operating profit dropped 15% to 251.82 billion from Y294.49 billion.

-By Juro Osawa, Dow Jones Newswires; 813-5255-2929; [e-mail]