Fujifilm cuts profit outlook on higher materials prices

TOKYO, Aug 28 (Reuters) - Japan's Fujifilm Holdings (4901.T: Quote, Profile, Research, Stock Buzz) slashed its annual operating profit forecast by nearly a quarter on higher raw material prices and heavier restructuring costs, missing market estimates by a large margin.

Fujifilm now expects its operating profit to be 160 billion yen ($1.5 billion) in the year ending March 2009, some 24 percent below its earlier forecast and a Reuters consensus estimate.

The company was hit by sluggish sales of photofilm and a sharp price fall for digital cameras and said it would book an extra 20 billion yen in restructuring costs on top of the 20 billion yen it had originally earmarked.

Fujifilm was the world's eighth-largest digital camera maker in 2007, according to research firm IDC. A Fujifilm spokesman said the additional restructuring expenses will be used to boost the competitiveness of its imaging solution and document solution businesses. He declined to elaborate.

Fujifilm's imaging solution business includes digital cameras and photofilm, and its document solution operations sell office equipment such as copiers and printers.

The company competes with Sony Corp (6758.T: Quote, Profile, Research, Stock Buzz) and Olympus Corp (7733.T: Quote, Profile, Research, Stock Buzz) in digital cameras and with Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz) and Ricoh Co Ltd (7752.T: Quote, Profile, Research, Stock Buzz) in office equipment.

Prior to the announcement, shares in Fujifilm closed up 2.4 percent at 3,460 yen, outperforming the benchmark Nikkei average .N225, which gained 0.1 percent.

(Reporting by Kiyoshi Takenaka; editing by Sophie Hardach)