Business / Corporate

Japan Tobacco cuts 2015 operating profit forecast by 17%

Bloomberg

Japan Tobacco Inc., which is paying $5 billion for rights to sell Natural American Spirit cigarettes outside the U.S., lowered its annual operating profit target by 17 percent.

Operating income will probably be ¥554 billion ($4.6 billion) for the year through December, compared with its previous forecast of ¥668 billion, Japan Tobacco said in a statement Wednesday.

Net income will probably be ¥474 billion compared with its previous target of ¥471 billion. Japan Tobacco also cut its full-year sales forecast to ¥2.25 trillion from ¥2.35 trillion.

The Tokyo-based company is transitioning to a new accounting period matching the calendar.

Japan Tobacco had raised its annual profit target by 22 percent to ¥471 billion in August, after withdrawing from its beverage and vending machine businesses to focus on cigarettes. The former Japanese tobacco monopoly has bought brands and products abroad in the face of a shrinking population and a stagnating smoking rate at home.

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