INTERVIEW-UPDATE 1-Murata orders stronger than expected
* Sees Oct-Dec orders matching last year's, sales to beat
* Capacitor plant use rate at over 90 pct in July-Nov
* Says demand better than expected, yen a concern
* Analysts expect upward revision to annual outlook
* Shares down 0.7 pct prior to news
(Adds details, background, share price)
By Mayumi Negishi and Reiji Murai
MAKUHARI, Chiba, Japan Oct 6 (Reuters) - Japanese electronic parts maker Murata Manufacturing Co Ltd (6981.T), which counts Nokia (NOK1V.HE) and auto parts makers among its clients, said orders in the quarter just ended were stronger than expected.
Economic stimulus measures pushing sales of low-emissions cars worldwide and flat TV and cellphones in China boosted orders in July-September to 10 percent more than expected to near-last year's pre-crisis level, its president said on Tuesday.
Murata is widely expected to revise up its annual forecast to a profit, but President Tsuneo Murata declined to say whether or not that was likely, adding that a strong yen was a risk.
"Demand now is strong. We have been unable to keep up in some cases," Murata said at an interview on the sidelines of CEATEC
(Combined Exhibition of Advanced Technologies), one of Japan's biggest electronics trade shows. "But this demand is bolstered by government policy. We can't tell yet whether it will lose steam or gain momentum."
Murata is the world's biggest maker of ceramic capacitors, tiny parts that control the flow of electricity in electronics ranging from flat TVs to game consoles to cellphones and car engine controls.
Orders in the second quarter were at about 90 percent of last year's 152 billion yen, Murata said.
Murata's output of its capacitors was more than 90 percent of its capacity in July-September, compared with 70 percent in April-June. That level will continue through November, so that orders in the current quarter will be on par with last year.
"On a sales basis, we should be able to beat last year's levels in October-December," thanks to a 60 billion yen order backlog, Murata said.
Analysts on average expect Murata, which forecasts a 1 billion yen operating loss in the year to March, to log a profit of 7.2 billion yen, according to a poll of 19 analysts by Thomson Reuters I/B/E/S.
Murata, which competes against home rivals Kyocera Corp (6971.T) and TDK Corp (6762.T), is now seeking growth through alliances and M&As to expand in non-ceramic businesses. It has already begun making inroads in secondary lithium ion batteries and in parts used to make fuel cells.
The Kyoto-based firm plans to take control of Panasonic Corp's (6752.T) multi-layer ceramic capacitor business in January and has taken a stake in Tokyo Denpa Co (6900.T), its partner in quartz crystal product development.
Murata now increasingly competes against low-cost products from South Korea's Samsung Electro-Mechanics Co Ltd (009150.KS) and Taiwan's Yageo Corp (2327.TW), and it hopes to shift more production to China and Malaysia to hedge against a stronger yen.
Murata will consider expanding production capacity in Malaysia or China next year, as it seeks to raise overseas production capacity to 30 percent of its total, up from the current 15 percent, the president said.
Total capex will rise next year compared with the planned 22 billion yen for the year to March, as Murata takes its foot off the brakes in terms of investment, he said.
Shares were down 0.7 percent prior to the news, in line with a 0.7 percent rise in Tokyo's electrical machinery subindex .IELEC.T.
(Editing by Joseph Radford)
((mayumi.negishi@thomsonreuters.com; +81-3-6441-1812; Reuters Messaging: mayumi.negishi.reuters.com@reuters.net))
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