Edgar Filing: KYOCERA CORP

Form 6-K

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of July 2007

Commission File Number: 1-07952

KYOCERA CORPORATION

6 Takeda Tobadono-cho, Fushimi-ku,

Kyoto 612-8501, Japan

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F X Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Registration S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Registration S-T Rule 101(b)(7):

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes No X

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b); 82-

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

KYOCERA CORPORATION

/s/ Akihiko Toyotani

Akihiko Toyotani

General Manager of Finance Division

Date: July 30, 2007

Information furnished on this form :

EXHIBITS


Exhibit Number
1.		Consolidated Financial Results for the Three Months Ended June 30, 2007

Consolidated Results of Kyocera Corporation and its Subsidiaries

for the Three Months Ended June 30, 2007

The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America.

1. Consolidated financial information for the three months ended June 30, 2007 :

(1) Consolidated results of operations :


	Japanese Yen
	Three months ended June 30,				Year ended March 31,
	2006		2007		2007
Net sales	¥291,201 million		¥315,450 million		¥1,283,897 million
% change from the previous period	10.5	%	8.3	%
Profit from operations	29,902 million		31,616 million		135,102 million
% change from the previous period	121.6	%	5.7	%
Income from continuing operations before income taxes	36,065 million		40,484 million		156,540 million
% change from the previous period	121.1	%	12.3	%
Net income	20,072 million		24,984 million		106,504 million
% change from the previous period	133.3	%	24.5	%
Earnings per share :
Basic	¥106.82		¥132.30		¥566.03
Diluted	106.61		131.93		564.79

Note :

In accordance with the Statement of Financial Accounting Standards (SFAS) No.144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the consolidated statement of income for the three months ended June 30, 2006 has been retrospectively reclassified as for the discontinued operations.

(2) Consolidated financial position :


	Japanese Yen
	June 30,				March 31,
	2006		2007		2007
Total assets	¥1,973,816 million		¥2,151,570 million		¥2,130,464 million
Stockholders’ equity	1,319,510 million		1,543,254 million		1,514,560 million
Stockholders’ equity to total assets	66.9	%	71.7	%	71.1	%
Stockholders’ equity per share	¥7,021.14		¥8,166.01		¥8,028.45

- 1 -

(3) Consolidated cash flows :


	Japanese Yen
	Three months ended June 30,				Year ended March 31,
	2006		2007		2007
Cash flows from operating activities	¥	27,604 million	¥	35,010 million	¥	149,644 million
Cash flows from investing activities		(61,083) million		(35,060) million		(151,703) million
Cash flows from financing activities		240 million		(3,549) million		(20,645) million
Cash and cash equivalents at end of period		266,624 million		286,562 million		282,208 million

2. Consolidated financial forecast for the year ending March 31, 2008 :


	Japanese Yen
	Year ending March 31, 2008
Net sales	¥	1,330,000 million
% change from the year ended March 31, 2007		3.6	%
Profit from operations	¥	151,000 million
% change from the year ended March 31, 2007		11.8	%
Income before income taxes	¥	166,000 million
% change from the year ended March 31, 2007		6.0	%
Net income	¥	103,000 million
% change from the year ended March 31, 2007		(3.3	)%

Notes :

1. There is no change in the above forecast for the year ending March 31, 2008 from the original forecast, which was shown in the Form 6-K submitted on April 26, 2007.

2. Forecast of earnings per share : ¥543.89

Net income per share amount is computed based on SFAS No.128.

Forecast of earnings per share is computed based on the diluted average number of shares outstanding during the three months ended June 30, 2007.

With regard to forecasts set forth above, please refer to the accompanying “Forward Looking Statements” on page 12.

3. Change in accounting policies except due to new accounting standards : None

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Business Results, Financial Condition and Prospects

1. Business Result for the Three Months Ended June 30, 2007

(1) Economic Situation and Business Environment

Despite a lack of vitality in industrial production, the overall domestic economy during the three months ended June 30, 2007 (the first quarter) continued at a pace of moderate expansion, as evidenced by factors such as an increase in capital expenditures. At the same time, the U.S. economy grew steadily despite concerns over the impact of issues related to housing loans for consumers with low creditworthiness on personal consumption. Increases in exports and production led to growth in the European economy.

In the digital consumer equipment market, which is the principal market for Kyocera Corporation and its consolidated subsidiaries (“Kyocera Group” or “Kyocera”), demand for passive components for such equipment expanded due to increased market strength compared with the three months ended June 30, 2006 (the previous first quarter).

(2) Consolidated Financial Results

Consolidated net sales for the first quarter amounted to ¥315,450 million, an increase of 8.3% compared with the previous first quarter, reflecting a substantial increase in sales in the Equipment Business and steady growth in sales in most of the Components Business.

The Components Business recorded a decline in profit compared with the previous first quarter due primarily to a downturn in demand for semiconductor parts used in some imaging devices and automotive components for overseas markets together with the impact of an increase in depreciation costs. However, the Equipment Business posted a substantial increase in profit due mainly to improved profitability in the Telecommunications Equipment Group, which made up for a decline in profit in the Components Business. As a result, profits for Kyocera Group as a whole increased, compared with the previous first quarter. Profit from operations increased by 5.7% to ¥31,616 million compared with the previous first quarter. Income from continuing operations before income taxes increased by 12.3% to ¥40,484 million compared with the previous first quarter due to increases in interest and dividend income and equity in earnings of affiliates and unconsolidated subsidiaries. Net income increased by 24.5% to ¥24,984 million compared with the previous first quarter.

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	(Yen in millions, except per share amounts and exchange rate)
	Three months ended June 30,
	2006		2007		Increase
	Amount	% of net sales	Amount	% of net sales	(Decrease) (%)
Net sales	291,201	100.0	315,450	100.0	8.3
Profit from operations	29,902	10.3	31,616	10.0	5.7
Income from continuing operations before income taxes	36,065	12.4	40,484	12.8	12.3
Net income	20,072	6.9	24,984	7.9	24.5
Diluted earnings per share	106.61	—	131.93	—	23.8
Average US$ exchange rate	115	—	121	—	—
Average Euro exchange rate	144	—	163	—	—

Note 1. Kyocera sold its shares in Kyocera Leasing Co., Ltd., a subsidiary engaged in financing services; as a result, business results for Kyocera Leasing Co., Ltd. for the previous first quarter have been recorded as income from discontinued operations in conformity with accounting principles generally accepted in the U.S. As a result, reclassified consolidated net sales for the previous first quarter decreased by ¥1,495 million compared with the result previously announced, reclassified profit from operations decreased by ¥740 million and income from continuing operations before income taxes for the previous first quarter decreased by ¥862 million, respectively.

(3) Implemented Management Measures and Significant Decisions

AVX Corporation (AVX), a U.S. subsidiary, decided to make American Technical Ceramics Corp., a U.S.-based maker of electronic components, into a wholly-owned subsidiary in June 2007, with the goal of strengthening its advanced components business such as high frequency ceramic capacitors. In doing so, AVX will expand its product line-up and its sales networks for high-value-added products.

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(4) Consolidated Financial Results by Reporting Segment

Components Business :

Sales in the Components Business increased by 5.5% compared with the previous first quarter to ¥162,695 million, while operating profit decreased by 8.4% to ¥23,456 million.

Consolidated results by reporting segment in the Components Business are as follows.

1) Fine Ceramic Parts Group

Sales of semiconductor processing equipment increased during the first quarter. However, sales of automotive components for overseas markets slumped. As a result, in this reporting segment sales increased, while operating profit decreased, compared with the previous first quarter.

2) Semiconductor Parts Group

Sales and operating profit in this reporting segment decreased compared with the previous first quarter. Despite an increase in sales of organic packages, there was an adjustment in demand for certain ceramic packages used in imaging devices.

3) Applied Ceramic Products Group

While sales increased in this reporting segment compared with the previous first quarter due primarily to growth recorded in the solar energy business and the cutting tools business, profitability in the medical materials business deteriorated due to reduction in official prices. As a result, operating profit decreased in this reporting segment.

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4) Electronic Device Group

Sales increased in this reporting segment compared with the previous first quarter. Apart from an increase in sales at AVX, sales of ceramic capacitors for flat-panel TVs and game consoles and of timing devices for mobile phone handsets grew. Operating profit slightly decreased due to an increase in depreciation.

Equipment Business:

Sales in the Equipment Business increased by 14.8% to ¥127,231 million, and operating profit increased by 55.6% to ¥9,037 million compared with the previous first quarter.

Consolidated results by reporting segment in the Equipment Business are as follows.

1) Telecommunications Equipment Group

Sales in this reporting segment increased compared with the previous first quarter due to robust sales of new mobile phone handsets in Japan. Operating profit improved compared with the previous first quarter due to the positive effect of sales growth in the domestic mobile phone handsets business and a reduction in loss at Kyocera Wireless Corp.

2) Information Equipment Group

Sales and operating profit increased in this reporting segment due to sales contribution of color printers and multifunctional systems released late in the year ended March 31, 2007 (fiscal 2007).

Others:

Sales in this reporting segment slightly increased by 0.2% to remain roughly on par with the previous first quarter at ¥31,628 million. Operating profit increased by 82.4% to ¥1,297 million compared with the previous first quarter due mainly to sales growth at Kyocera Communication Systems Co., Ltd. and reduced loss in the optical-related business.

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Consolidated Sales by Reporting Segment


	(Yen in millions)
	Three months ended June 30,
	2006				2007				Increase (Decrease) %
	Amount		% of net sales		Amount		% of net sales		Increase (Decrease) %
Fine Ceramic Parts Group	18,617		6.4		20,545		6.5		10.4
Semiconductor Parts Group	36,013		12.4		35,277		11.2		(2.0	)
Applied Ceramic Products Group	31,258		10.7		33,420		10.6		6.9
Electronic Device Group	68,307		23.5		73,453		23.3		7.5

Total Components Business	154,195		53.0		162,695		51.6		5.5
Telecommunications Equipment Group	50,577		17.4		59,959		19.0		18.5
Information Equipment Group	60,266		20.7		67,272		21.3		11.6

Total Equipment Business	110,843		38.1		127,231		40.3		14.8
Others	31,556		10.8		31,628		10.0		0.2
Adjustments and eliminations	(5,393	)	(1.9	)	(6,104	)	(1.9	)	—

Net sales	291,201		100.0		315,450		100.0		8.3

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Consolidated Operating Profit by Reporting Segment


	(Yen in millions)
	Three months ended June 30,
	2006			2007			Increase (Decrease) %
	Amount		% of segment sales	Amount		% of segment sales	Increase (Decrease) %
Fine Ceramic Parts Group	3,431		18.4	3,045		14.8	(11.3	)
Semiconductor Parts Group	5,511		15.3	4,023		11.4	(27.0	)
Applied Ceramic Products Group	6,389		20.4	6,136		18.4	(4.0	)
Electronic Device Group	10,269		15.0	10,252		14.0	(0.2	)

Total Components Business	25,600		16.6	23,456		14.4	(8.4	)
Telecommunications Equipment Group	(2,843	)	—	(369	)	—	—
Information Equipment Group	8,651		14.4	9,406		14.0	8.7

Total Equipment Business	5,808		5.2	9,037		7.1	55.6
Others	711		2.3	1,297		4.1	82.4

Operating profit	32,119		11.0	33,790		10.7	5.2
Corporate	4,342		—	4,917		—	13.2
Equity in (losses) earnings of affiliates and unconsolidated subsidiaries	(343	)	—	1,772		—	—
Adjustments and eliminations	(53	)	—	5		—	—

Income from continuing operations before income taxes	36,065		12.4	40,484		12.8	12.3

Note 2. From April 1, 2007, the “Optical Equipment Group,” previously a separate reporting segment, has been reclassified into “Others.” Accordingly, sales and operating profit for the previous first quarter have been retroactively reclassified.

Note 3. For the reasons set forth in Note 1 on page 4 and Note 2 above, net sales of “Others” in the previous first quarter increased by ¥1,118 million and “Adjustments and eliminations” decreased by ¥(219) million compared with those previously announced. Also, operating profit of “Others” in the previous first quarter decreased by ¥1,329 million, and “Adjustments and eliminations” increased by ¥(1) million compared with those previously announced.

(5) Consolidated Sales by Geographic Area


	(Yen in millions)
	Three months ended June 30,
	2006		2007		Increase (Decrease) (% )
	Amount	% of net sales	Amount	% of net sales	Increase (Decrease) (% )
Japan	112,328	38.6	121,804	38.6	8.4
USA	61,703	21.2	62,692	19.9	1.6
Asia	51,128	17.5	57,480	18.2	12.4
Europe	46,468	16.0	55,383	17.6	19.2
Others	19,574	6.7	18,091	5.7	(7.6	)

Net sales	291,201	100.0	315,450	100.0	8.3

Note 4. For the reasons set forth in Note 1 on page 4, consolidated sales in Japan in the previous first quarter decreased by ¥1,495 million, compared with that of previously announced.

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1) Japan

Sales increased compared with the previous first quarter due to large growth for mobile phone handsets and products in the Fine Ceramic Parts Group.

2) United States of America

Sales slightly increased compared with the previous first quarter due to growth in mobile phone handsets and products in the Information Equipment Group, which was partly offset by decline in sales of the Electronic Device Group and the Semiconductor Parts Group.

3) Asia

Sales substantially increased compared with the previous first quarter due to growth for products in the Electronic Device Group although sales in Personal Handyphone System decreased.

4) Europe

Sales increased largely compared with the previous first quarter due to growth for the Information Equipment Group coupled with growth in solar energy business.

5) Others

Sales decreased compared with the previous first quarter due to decline in sales of the Telecommunication Equipment Group in Oceania.

- 9 -

2. Cash flows

Cash and cash equivalents at June 30, 2007 increased by ¥4,354 million to ¥286,562 million compared with those at March 31, 2007.


	(Yen in millions)
	Three months ended June 30,
	2006		2007
Cash flows from operating activities	27,604		35,010
Cash flows from investing activities	(61,083	)	(35,060	)
Cash flows from financing activities	240		(3,549	)
Effect of exchange rate changes on cash and cash equivalents	(946	)	7,953
Net (decrease) increase in cash and cash equivalents	(34,185	)	4,354
Cash and cash equivalents at beginning of period	300,809		282,208
Cash and cash equivalents at end of period	266,624		286,562

1) Cash Flows from Operating Activities

Net cash provided by operating activities in the first quarter increased by ¥7,406 million to ¥35,010 million from the previous first quarter of ¥27,604 million. Although payments of income taxes increased, net income increased by ¥4,912 million and cash and cash equivalent in connection with receivables and inventories significantly increased compared with the previous first quarter.

2) Cash Flows from Investing Activities

Net cash used in investing activities in the first quarter decreased by ¥26,023 million to ¥35,060 million from the previous first quarter of ¥61,083 million. This was due mainly to a decrease in deposit of negotiable certificate of deposits and time deposits compared with the previous first quarter.

3) Cash Flows from Financing Activities

Cash flows from financing activities changed from ¥240 million of net cash provided by during the previous first quarter to ¥3,549 million of net cash used in during this first quarter. This was due mainly to decreases in proceeds of issuance of short and long term debt and increases in dividends paid.

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3. Consolidated Financial Forecast for the Year Ending March 31, 2008

Performance in the first quarter progressed steadily toward the attainment of full-year forecasts. Production activities for personal computers and mobile phone handsets are expected to be further brisk from the second quarter of the year ending March 31, 2008 (fiscal 2008) onward. As a result, Kyocera forecasts growth in demand of components used in these products. Profits are therefore expected to increase in the Components Business. Kyocera also forecasts growth in the solar energy business in light of plans to increase production volume of solar cells and modules in the second half of fiscal 2008. In addition, an ongoing program of new product introductions is expected to boost sales and profits in the Equipment Business.

Consolidated forecasts for fiscal 2008 are as follows and there is no revision of our initial forecasts.

Consolidated forecasts for fiscal 2008 (Released on April 26, 2007)


	(Yen in millions, except per share amounts and exchange rates)
	Fiscal 2008 Forecasts		Increase (Decrease) from Fiscal 2007 (% )
	Amount	% of net sales
Net sales	1,330,000	100.0	3.6
Profit from operations	151,000	11.4	11.8
Income before income taxes	166,000	12.5	6.0
Net income	103,000	7.7	(3.3	)
Diluted earnings per share	543.89	—	(3.7	)
Average US$ exchange rate	110	—	—
Average Euro exchange rate	150	—	—

Note 5. The average U.S. dollar and Euro exchange rates set forth above are the forecast average from July 1, 2007 to March 31, 2008.

Note 6. Forecast of diluted earnings per share for fiscal 2008 set forth above is computed based on the diluted average number of shares outstanding during the first quarter.

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Note 7. Forward-Looking Statements

Certain of the statements made in this document are forward-looking statements (within the meaning of Section 21E of the U.S. Securities and Exchange Act of 1934), which are based on our current assumptions and beliefs in light of the information currently available to us. These forward-looking statements involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors include, but are not limited to: general economic conditions in our markets, which are primarily Japan, North America, Europe, and Asia, particularly including China; unexpected changes in economic, political and legal conditions in China; our ability to develop, launch and produce innovative products, including meeting quality and delivery standards, and our ability to otherwise meet the advancing technical requirements of our customers, particularly in the highly competitive markets for ceramics, semiconductor parts and electronic components manufacturing delays or defects resulting from outsourcing or internal manufacturing processes which may adversely affect our production yields and operating results; factors that may affect our exports, including a strong yen, political and economic instability, difficulties in collection of accounts receivable, decrease in cost competitiveness of our products, increases in shipping and handling costs, difficulty in staffing and managing international operations, and inadequate protection of our intellectual property; changes in exchange rates, particularly between the yen and the U.S. dollar and euro, respectively, in which we make significant sales; inability to secure skilled employees, particularly engineering and technical personnel; insufficient protection of our trade secrets and patents; holding licenses to continue to manufacture and sell certain of its products, the expense of which may adversely affects its results of operations; future initiatives and in-process research and development may not produce the desired results; events that may impact negatively on our markets or supply chain, including terrorist acts and outbreaks of diseases; the occurrence of natural disasters, such as earthquakes, in locations where our manufacturing and other key business facilities are located; and fluctuations in the value of, and impairment losses on, securities and other assets held by us, and changes in accounting principles. Such risks, uncertainties and other factors may cause our actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements included in this document.

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CONSOLIDATED BALANCE SHEETS


	Yen in millions
	(Unaudited) June 30, 2006				(Unaudited) June 30, 2007				March 31, 2007
	Amount			%	Amount			%	Amount			%
Current assets :
Cash and cash equivalents	¥	266,624			¥	286,562			¥	282,208
Short-term investments		129,941				215,888				213,495
Trade notes receivables		24,981				23,388				25,033
Trade accounts receivables		199,679				227,590				236,380
Less allowances for doubtful accounts and sales returns		(7,055	)			(6,333	)			(5,960	)
Inventories		203,030				211,773				209,188
Deferred income taxes		40,911				46,239				45,390
Other current assets		75,596				81,202				40,757

Total current assets		933,707		47.3		1,086,309		50.5		1,046,491		49.1

Non-current assets :
Investments and advances :
Investments in and advances to affiliates and unconsolidated subsidiaries		7,017				11,941				10,093
Securities and other investments		582,216				660,474				690,568

Total investments and advances		589,233		29.9		672,415		31.2		700,661		32.9
Property, plant and equipment, at cost :
Land		58,375				57,604				56,806
Buildings		251,710				266,971				261,998
Machinery and equipment		705,111				748,955				729,636
Construction in progress		8,232				10,071				7,362
Less accumulated depreciation		(737,524	)			(800,460	)			(774,896	)

Total property, plant and equipment, at cost		285,904		14.5		283,141		13.2		280,906		13.2
Goodwill		31,166		1.6		34,204		1.6		32,894		1.5
Intangible assets		30,041		1.5		23,876		1.1		24,657		1.2
Other assets		103,765		5.2		51,625		2.4		44,855		2.1

Total non-current assets		1,040,109		52.7		1,065,261		49.5		1,083,973		50.9

Total assets	¥	1,973,816		100.0	¥	2,151,570		100.0	¥	2,130,464		100.0

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	Yen in millions
	(Unaudited)				(Unaudited)
	June 30, 2006				June 30, 2007				March 31, 2007
	Amount			%	Amount			%	Amount			%
Current liabilities :
Short-term borrowings	¥	99,062			¥	21,998			¥	15,250
Current portion of long-term debt		17,728				5,501				5,853
Trade notes and accounts payable		103,863				95,400				100,295
Other notes and accounts payable		44,631				47,708				49,134
Accrued payroll and bonus		45,889				49,493				41,680
Accrued income taxes		17,756				15,732				36,475
Other accrued liabilities		31,778				32,756				33,391
Other current liabilities		19,701				28,341				24,110

Total current liabilities		380,408		19.3		296,929		13.8		306,188		14.4

Non-current liabilities :
Long-term debt		31,848				6,984				7,283
Accrued pension and severance liabilities		24,844				16,922				16,297
Deferred income taxes		140,975				201,593				206,858
Other non-current liabilities		10,735				14,417				12,355

Total non-current liabilities		208,402		10.5		239,916		11.2		242,793		11.4

Total liabilities		588,810		29.8		536,845		25.0		548,981		25.8

Minority interests in subsidiaries		65,496		3.3		71,471		3.3		66,923		3.1
Stockholders’ equity :
Common stock		115,703				115,703				115,703
Additional paid-in capital		161,960				162,528				162,363
Retained earnings		978,261				1,072,926				1,055,293
Accumulated other comprehensive income		91,269				211,213				203,056
Treasury stock, at cost		(27,683	)			(19,116	)			(21,855	)

Total stockholders’ equity		1,319,510		66.9		1,543,254		71.7		1,514,560		71.1

Total liabilities, minority interests and stockholders’ equity	¥	1,973,816		100.0	¥	2,151,570		100.0	¥	2,130,464		100.0

Note : Accumulated other comprehensive income is as follows.


	Yen in millions
	June 30, 2006			June 30, 2007			March 31, 2007
Net unrealized gains on securities	¥	104,270		¥	177,110		¥	184,670
Net unrealized (losses) gains on derivative financial instruments	¥	(134	)	¥	(49	)	¥	63
Minimum pension liability adjustments	¥	(2,057	)		—			—
Pension adjustments		—		¥	14,831		¥	15,419
Foreign currency translation adjustments	¥	(10,810	)	¥	19,321		¥	2,904

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CONSOLIDATED STATEMENTS OF INCOME (Unaudited)


	Yen in millions and shares in thousands, except per share amounts
	Three months ended June 30,										Increase
	2006					2007					(Decrease)
	Amount			%		Amount			%		Amount			%
Net sales	¥	291,201		100.0		¥	315,450		100.0		¥	24,249		8.3
Cost of sales		200,345		68.8			219,826		69.7			19,481		9.7

Gross profit		90,856		31.2			95,624		30.3			4,768		5.2
Selling, general and administrative expenses		60,954		20.9			64,008		20.3			3,054		5.0

Profit from operations		29,902		10.3			31,616		10.0			1,714		5.7
Other income (expenses) :
Interest and dividend income		4,586		1.6			6,309		2.0			1,723		37.6
Interest expense		(219	)	(0.1	)		(410	)	(0.1	)		(191	)	—
Foreign currency transaction (losses) gains, net		(55	)	(0.0	)		1,009		0.3			1,064		—
Equity in (losses) earnings of affiliates and unconsolidated subsidiaries		(343	)	(0.1	)		1,772		0.6			2,115		—
Gains (losses) on sales of securities, net		1,810		0.6			(14	)	(0.0	)		(1,824	)	—
Other, net		384		0.1			202		0.0			(182	)	(47.4	)

Total other income		6,163		2.1			8,868		2.8			2,705		43.9

Income from continuing operations before income taxes and minority interests		36,065		12.4			40,484		12.8			4,419		12.3
Income taxes		15,080		5.2			13,972		4.4			(1,108	)	(7.3	)

Income from continuing operations before minority interests		20,985		7.2			26,512		8.4			5,527		26.3
Minority interests		(1,394	)	(0.5	)		(1,528	)	(0.5	)		(134	)	—

Income from continuing operations		19,591		6.7			24,984		7.9			5,393		27.5
Income from discontinued operations		481		0.2			—		—			(481	)	—

Net income	¥	20,072		6.9		¥	24,984		7.9		¥	4,912		24.5

Earnings per share :
Income from continuing operations :
Basic	¥	104.26				¥	132.30
Diluted	¥	104.06				¥	131.93
Income from discontinued operations :
Basic	¥	2.56					—
Diluted	¥	2.55					—
Net income :
Basic	¥	106.82				¥	132.30
Diluted	¥	106.61				¥	131.93
Weighted average number of shares of common stock outstanding :
Basic		187,901					188,846
Diluted		188,283					189,378

- 15 -

Notes :

Kyocera applies the Statement of Financial Accounting Standards Board (SFAS) No.130, “Financial Reporting of Comprehensive Income.” Based on this standard, comprehensive income for the three months ended June 30, 2006 and 2007 were an increase of ¥38,394 million and an increase of ¥33,141 million, respectively.

Earnings per share amounts were computed based on SFAS No.128, “Earnings per Share.” Under SFAS No.128, basic earnings per share was computed based on the average number of shares of common stock outstanding during each period and diluted earnings per share assumed the dilution that could occur if securities or other contracts to issue common stock were converted into common stock, exercised or resulted in the issuance of common stock.

3.	In accordance with SFAS No.144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the consolidated financial statement for the three months ended June 30, 2006 has been retrospectively reclassified as for the discontinued operations.

- 16 -

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


	Yen in millions and shares in thousands
(Number of shares of common stock)	Common stock		Additional paid-in capital		Retained earnings			Accumulated other comprehensive income		Treasury stock			Comprehensive income
Balance, March 31, 2006 (187,755)	¥	115,703	¥	161,994	¥	967,576		¥	72,947	¥	(29,143	)
Net income for the year						106,504							¥	106,504
Other comprehensive income									112,551					112,551

Total comprehensive income for the year													¥	219,055

Adjustment for initially applying SAFS No. 158, net of taxes									17,558
Cash dividends						(18,787	)
Purchase of treasury stock (24)											(251	)
Reissuance of treasury stock (918)				127							7,539
Stock option plan of subsidiaries				242

Balance, March 31, 2007 (188,649)		115,703		162,363		1,055,293			203,056		(21,855	)
(Unaudited)
Cumulative effect of applying FIN 48 to opening balance (Note)						3,968
Net income for the period						24,984							¥	24,984
Other comprehensive income									8,157					8,157

Total comprehensive income for the period													¥	33,141

Cash dividends						(11,319	)
Purchase of treasury stock (5)											(60	)
Reissuance of treasury stock (341)				102							2,799
Stock option plan of subsidiaries				63

Balance, June 30, 2007 (188,985)	¥	115,703	¥	162,528	¥	1,072,926		¥	211,213	¥	(19,116	)

- 17 -


	Yen in millions and shares in thousands
(Number of shares of common stock)	Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income		Treasury stock			Comprehensive income
Balance, March 31, 2006 (187,755)	¥	115,703	¥	161,994		¥	967,576		¥	72,947	¥	(29,143	)
(Unaudited)
Net income for the period							20,072							¥	20,072
Other comprehensive income										18,322					18,322

Total comprehensive income for the period														¥	38,394

Cash dividends							(9,387	)
Purchase of treasury stock (4)												(43	)
Reissuance of treasury stock (183)				(34	)							1,503

Balance, June 30, 2006 (187,934)	¥	115,703	¥	161,960		¥	978,261		¥	91,269	¥	(27,683	)

Note :

In June 2006, the Financial Accounting Standard Board (FASB) issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No.109” (FIN 48) which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes.” FIN 48 also provides guidance on derecognition, classification, interest and penalties, disclosure and transitional measures. Cumulative effect of applying FIN 48, which was effective April 1, 2007, increased the opening balance of retained earnings by ¥3,968 million.

- 18 -

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Yen in millions
	Three months ended June 30,
	2006			2007
Cash flows from operating activities :
Net income	¥	20,072		¥	24,984
Adjustments to reconcile net income to net cash provided by operating activities :
Depreciation and amortization		16,699			19,242
Write-down of inventories		1,640			2,205
(Gains) losses on sales of securities, net		(1,810	)		14
Minority interests		1,394			1,528
Decrease in receivables		4,002			17,132
(Increase) decrease in inventories		(15,355	)		1,953
Increase (decrease) in notes and accounts payable		3,109			(16,223	)
Decrease in accrued income taxes		(10,138	)		(20,013	)
Increase in other current liabilities		9,583			11,605
Other, net		(1,592	)		(7,417	)

Net cash provided by operating activities		27,604			35,010

Cash flows from investing activities :
Payments for purchases of securities		(19,516	)		(11,915	)
Sales and maturities of securities		16,009			21,316
Payments for purchases of property, plant and equipment, and intangible assets		(18,219	)		(17,839	)
Proceeds from sales of property, plant and equipment, and intangible assets		309			300
Deposit of negotiable certificate of deposits and time deposits		(85,924	)		(49,664	)
Withdrawal of negotiable certificate of deposits and time deposits		46,249			22,533
Other, net		9			209

Net cash used in investing activities		(61,083	)		(35,060	)

Cash flows from financing activities :
Increase in short-term debt		8,324			5,847
Proceeds from issuance of long-term debt		1,451			—
Payments of long-term debt		(1,326	)		(914	)
Dividends paid		(9,508	)		(11,174	)
Purchase of treasury stock		(43	)		(60	)
Reissuance of treasury stock		1,469			2,901
Other, net		(127	)		(149	)

Net cash provided by (used in) financing activities		240			(3,549	)

Effect of exchange rate changes on cash and cash equivalents		(946	)		7,953

Net (decrease) increase in cash and cash equivalents		(34,185	)		4,354
Cash and cash equivalents at beginning of period		300,809			282,208

Cash and cash equivalents at end of period	¥	266,624		¥	286,562

- 19 -

SEGMENT INFORMATION (Unaudited)

1. Reporting segments :


	Yen in millions
	Three months ended June 30,
	2006			2007			Increase (Decrease)
	Amount			Amount			Amount			%
Net sales :
Fine Ceramic Parts Group	¥	18,617		¥	20,545		¥	1,928		10.4
Semiconductor Parts Group		36,013			35,277			(736	)	(2.0	)
Applied Ceramic Products Group		31,258			33,420			2,162		6.9
Electronic Device Group		68,307			73,453			5,146		7.5
Telecommunications Equipment Group		50,577			59,959			9,382		18.5
Information Equipment Group		60,266			67,272			7,006		11.6
Others		31,556			31,628			72		0.2
Adjustments and eliminations		(5,393	)		(6,104	)		(711	)	—

	¥	291,201		¥	315,450		¥	24,249		8.3

Operating profit :
Fine Ceramic Parts Group	¥	3,431		¥	3,045		¥	(386	)	(11.3	)
Semiconductor Parts Group		5,511			4,023			(1,488	)	(27.0	)
Applied Ceramic Products Group		6,389			6,136			(253	)	(4.0	)
Electronic Device Group		10,269			10,252			(17	)	(0.2	)
Telecommunications Equipment Group		(2,843	)		(369	)		2,474		—
Information Equipment Group		8,651			9,406			755		8.7
Others		711			1,297			586		82.4

		32,119			33,790			1,671		5.2
Corporate		4,342			4,917			575		13.2
Equity in (losses) earnings of affiliates and unconsolidated subsidiaries		(343	)		1,772			2,115		—
Adjustments and eliminations		(53	)		5			58		—

Income from continuing operations before income taxes and minority interests	¥	36,065		¥	40,484		¥	4,419		12.3

Depreciation and amortization :
Fine Ceramic Parts Group	¥	905		¥	1,459		¥	554		61.2
Semiconductor Parts Group		2,770			3,129			359		13.0
Applied Ceramic Products Group		1,811			2,006			195		10.8
Electronic Device Group		4,430			5,274			844		19.1
Telecommunications Equipment Group		1,547			2,241			694		44.9
Information Equipment Group		3,252			2,788			(464	)	(14.3	)
Others		1,311			1,561			250		19.1
Corporate		637			784			147		23.1

Total	¥	16,663		¥	19,242		¥	2,579		15.5

Capital expenditures :
Fine Ceramic Parts Group	¥	990		¥	1,174		¥	184		18.6
Semiconductor Parts Group		3,310			2,027			(1,283	)	(38.8	)
Applied Ceramic Products Group		845			1,717			872		103.2
Electronic Device Group		5,404			5,113			(291	)	(5.4	)
Telecommunications Equipment Group		943			542			(401	)	(42.5	)
Information Equipment Group		3,915			1,924			(1,991	)	(50.9	)
Others		730			792			62		8.5
Corporate		575			1,755			1,180		205.2

Total	¥	16,712		¥	15,044		¥	(1,668	)	(10.0	)

- 20 -

2. Geographic segments (Sales and Operating profit by geographic area) :


	Yen in millions
	Three months ended June 30,
	2006			2007			Increase (Decrease)
	Amount			Amount			Amount			%
Net sales :
Japan	¥	119,482		¥	128,689		¥	9,207		7.7
Intra-group sales and transfer between geographic areas		91,654			93,725			2,071		2.3

		211,136			222,414			11,278		5.3

United States of America		71,539			73,213			1,674		2.3
Intra-group sales and transfer between geographic areas		8,941			8,739			(202	)	(2.3	)

		80,480			81,952			1,472		1.8

Asia		45,263			49,761			4,498		9.9
Intra-group sales and transfer between geographic areas		36,880			42,908			6,028		16.3

		82,143			92,669			10,526		12.8

Europe		48,824			57,739			8,915		18.3
Intra-group sales and transfer between geographic areas		10,064			10,546			482		4.8

		58,888			68,285			9,397		16.0

Others		6,093			6,048			(45	)	(0.7	)
Intra-group sales and transfer between geographic areas		2,595			3,587			992		38.2

		8,688			9,635			947		10.9

Adjustments and eliminations		(150,134	)		(159,505	)		(9,371	)	—

	¥	291,201		¥	315,450		¥	24,249		8.3

Operating profit :
Japan	¥	23,162		¥	23,897		¥	735		3.2
United States of America		2,449			2,203			(246	)	(10.0	)
Asia		5,212			5,592			380		7.3
Europe		1,755			2,758			1,003		57.2
Others		1,578			774			(804	)	(51.0	)

		34,156			35,224			1,068		3.1
Adjustments and eliminations		(2,090	)		(1,429	)		661		—

		32,066			33,795			1,729		5.4
Corporate		4,342			4,917			575		13.2
Equity in (losses) earnings of affiliates and unconsolidated subsidiaries		(343	)		1,772			2,115		—

Income from continuing operations before income taxes and minority interest	¥	36,065		¥	40,484		¥	4,419		12.3

- 21 -

3. Geographic segments (Sales by region) :


	Yen in millions
	Three months ended June 30,						Increase (Decrease)
	2006			2007			Increase (Decrease)
	Amount		%	Amount		%	Amount		%
Japan	¥112,328		38.6	¥121,804		38.6	¥9,476		8.4
United States of America	61,703		21.2	62,692		19.9	989		1.6
Asia	51,128		17.5	57,480		18.2	6,352		12.4
Europe	46,468		16.0	55,383		17.6	8,915		19.2
Others	19,574		6.7	18,091		5.7	(1,483	)	(7.6	)

Net sales	¥291,201		100.0	¥315,450		100.0	¥24,249		8.3

Sales outside Japan	¥178,873			¥193,646			14,773		8.3
Sales outside Japan to net sales	61.4	%		61.4	%

- 22 -

Appendix

Consolidated Orders and Production by Reporting Segment

Consolidated Orders by Reporting Segment


	(Yen in millions)
	Three month ended June 30,								Increase (Decrease) (%)
	2006				2007
	Amount		% of orders		Amount		% of orders
Fine Ceramic Parts Group	19,629		6.3		21,194		6.8		8.0
Semiconductor Parts Group	37,542		12.1		36,062		11.6		(3.9	)
Applied Ceramic Products Group	32,985		10.7		34,162		10.9		3.6
Electronic Device Group	73,354		23.7		75,645		24.2		3.1

Total Components Business	163,510		52.8		167,063		53.5		2.2
Telecommunications Equipment Group	58,714		18.9		50,872		16.3		(13.4	)
Information Equipment Group	60,072		19.4		67,601		21.7		12.5

Total Equipment Business	118,786		38.3		118,473		38.0		(0.3	)
Others	32,960		10.6		32,256		10.3		(2.1	)
Adjustments and eliminations	(5,391	)	(1.7	)	(5,799	)	(1.8	)	—

Orders	309,865		100.0		311,993		100.0		0.7

Note 1. From April 1, 2007, the “Optical Equipment Group,” previously a separate reporting segment, has been reclassified into “Others.” Accordingly, previously reported orders for the previous first quarter have been retroactively reclassified.

Note 2. For the reasons set forth in Note 1 on page 4 and Note 1 above, orders of “Others” in the previous first quarter increased by ¥778 million, “Adjustments and eliminations” decreased by ¥(202) million and total of “Orders” decreased by ¥2,112 million compared with those previously announced.

- 23 -

Consolidated Production by Reporting Segment


	(Yen in millions)
	Three month ended June 30,				Increase (Decrease) (%)
	2006		2007
	Amount	% of production	Amount	% of production
Fine Ceramic Parts Group	18,659	6.2	20,634	6.5	10.6
Semiconductor Parts Group	37,473	12.6	35,642	11.3	(4.9	)
Applied Ceramic Products Group	31,501	10.6	35,208	11.2	11.8
Electronic Device Group	69,283	23.3	75,306	23.9	8.7

Total Components Business	156,916	52.7	166,790	52.9	6.3
Telecommunications Equipment Group	52,358	17.6	55,697	17.7	6.4
Information Equipment Group	65,830	22.1	69,103	21.9	5.0

Total Equipment Business	118,188	39.7	124,800	39.6	5.6
Others	22,586	7.6	23,569	7.5	4.4

Production	297,690	100.0	315,159	100.0	5.9

Note 3. From April 1, 2007, the “Optical Equipment Group,” previously a separate reporting segment, has been reclassified into “Others.” Accordingly, previously reported production for the previous first quarter have been retroactively reclassified.

- 24 -


		July 30, 2007

		KYOCERA CORPORATION

Consolidated Financial Highlights (Unaudited)

Results for the Three Months Ended June 30, 2007


	(Yen in millions, except per share amounts and exchange rates)
	Three months ended June 30,		Increase (Decrease) %
	2006	2007	Increase (Decrease) %
Net sales	291,201	315,450	8.3
Profit from operations	29,902	31,616	5.7
Income from continuing operations before income taxes	36,065	40,484	12.3
Net income	20,072	24,984	24.5
Average exchange rates :
US$	115	121	—
Euro	144	163	—
Earnings per share :
Net income :
Basic	106.82	132.30	23.9
Diluted	106.61	131.93	23.8
Capital expenditures	16,712	15,044	(10.0	)
Depreciation	14,427	16,281	12.9
R&D expenses	15,632	15,315	(2.0	)
Total assets	1,973,816	2,151,570	9.0
Stockholders’ equity	1,319,510	1,543,254	17.0
Sales of products manufactured outside Japan to net sales (%)	34.1	33.7	—

Note : Kyocera sold its shares in Kyocera Leasing Co., Ltd., a subsidiary engaged in financing services in the year ended March 31, 2007, and as a result, business results of Kyocera Leasing Co., Ltd. for the three months ended June 30, 2006 have been recorded as income from discontinued operations in conformity with accounting principles generally accepted in the U.S. As a result, reclassified consolidated net sales for the three months ended June 30, 2006 decreased by ¥1,495 million compared with the result previously announced, reclassified profit from operations decreased by ¥740 million, income from continuing operations before income taxes decreased by ¥862 million, capital expenditures decreased by ¥18 million, depreciation decreased by ¥17 million, respectively. The rate of sales of products manufactured outside Japan to net sales was 0.2 points higher than the result previously announced.

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