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 2004

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/ HIDEKI ISHIDA

Hideki Ishida

Managing Executive Officer

General Manager of

Corporate Finance Division

Date: July 29, 2004

Information furnished on this form:

EXHIBITS


Exhibit Number
1.		Consolidated Financial Results for the Three Months Ended June 30, 2004

2.		Consolidated Financial Results for the Three Months Ended June 30, 2004 (Information purposes only)

July 29, 2004

KYOCERA CORPORATION

Consolidated Financial Highlights (Unaudited)

Results for the Three Months Ended June 30, 2004

(Yen in millions, except per share amounts and exchange rates)


	Three Months Ended June 30,		Increase (Decrease) (%)
	2004	2003	Increase (Decrease) (%)
Net sales	293,143	253,126	15.8
Profit from operations	34,751	12,798	171.5
Income before income taxes	38,062	16,442	131.5
Net income	21,982	10,730	104.9
Average exchange rates :
US$	110	118	—
Euro	132	135	—
Earnings per share :
Net Income
Basic	117.25	58.01	—
Diluted	117.17	58.01	—
Capital expenditures	11,811	14,147	(16.5	)
Depreciation	13,233	14,021	(5.6	)
R&D expenses	13,875	12,243	13.3
Sales of products manufactured outside Japan to net sales (%)	36.1	36.0	—

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Consolidated Results of Kyocera Corporation and its Subsidiaries

for the Three Months Ended June 30, 2004

1.	The basic items on preparation for consolidated results for the three months ended June 30, 2004 :

(1)

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

(2)

Change in accounting policies : None

(3)

Changes in scope of consolidation and application of the equity method :


	Consolidation	Equity method
Increase	1	0
Decrease	1	0

2.	Consolidated financial information for the three months ended June 30, 2004 :

(1)	Consolidated results of operations :


	Three months ended June 30,						Year ended March 31,
	2004			2003			2004
Net sales	¥	293,143 million		¥	253,126 million		¥	1,140,814 million
% change from the previous period		15.8	%		(0.3	)%		6.6	%
Profit from operations		34,751 million			12,798 million			108,962 million
% change from the previous period		171.5	%		(42.5	)%		30.7	%
Income before income taxes		38,062 million			16,442 million			115,040 million
% change from the previous period		131.5	%		0.4	%		51.3	%
Net income		21,982 million			10,730 million			68,086 million
% change from the previous period		104.9	%		45.2	%		65.4	%
Earnings per share :
Basic	¥	117.25		¥	58.01		¥	364.79
Diluted		117.17			58.01			364.78

(2)	Consolidated financial condition :


	June 30,						March 31,
	2004			2003			2004
Total assets	¥	1,833,390 million		¥	1,700,020 million		¥	1,794,758 million
Stockholders’ equity		1,186,373 million			1,053,922 million			1,153,746 million
Stockholders’ equity to total assets		64.7	%		62.0	%		64.3	%
Stockholders’ equity per share	¥	6,327.55		¥	5,698.04		¥	6,153.83

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(3)	Consolidated cash flows :


	Three months ended June 30,				Year ended March 31,
	2004		2003		2004
Cash flows from operating activities	¥	26,812 million	¥	6,919 million	¥	62,575 million
Cash flows from investing activities		(114,211) million		2,841 million		29,581 million
Cash flows from financing activities		(7,576) million		(9,391) million		(20,422) million
Cash and cash equivalents at end of period		267,801 million		299,632 million		361,132 million

3.	Consolidated financial forecast for the year ending March 31, 2005 :

There is no revision of our initial forecast for the fiscal year ending March 31, 2005, which was described in Form 6-K filed on April 27, 2004. (Please refer to the accompanying “Forward Looking Statements” on page 11 with regard to the forecasts.)

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Business Results and Cash Flows for the Three Months Ended June 30, 2004

1. Business Results for the Three Months Ended June 30, 2004

(1) Economic Situation and Business Environment

The Japanese economy showed clear signs of recovery during the three months ended June 30, 2004 (the first quarter) represented by improving corporate earnings, expanding capital investment in the private sector and increasing personal consumption. The U.S economy also recovered steadily supported by an improvement in the employment situation in addition to expansion of capital expenditures in the private sector and increasing personal consumption. The European economy as a whole recovered moderately. Asian economy grew smoothly due mainly to the strong growth of the Chinese economy.

In the electronics industry, the production volume increased in Asia, especially Japan and China for mobile phones and other digital consumer products. Additionally, markets for semiconductors and personal computers expanded steadily on a global scale.

(2) Consolidated Financial Results

(Yen in millions, except per share amounts and exchange rates)


	Three Months Ended June 30,		Increase (Decrease) (%)
	2004	2003	Increase (Decrease) (%)
Net sales	293,143	253,126	15.8
Profit from operations	34,751	12,798	171.5
Income before income taxes	38,062	16,442	131.5
Net income	21,982	10,730	104.9
Diluted earnings per share	117.17	58.01	—
US$ average exchange rate	110	118	—
Euro average exchange rate	132	135	—

1) Sales

Sales of Kyocera Corporation and its consolidated subsidiaries (Kyocera) for the first quarter increased in all operating segments compared with those in the three months ended June 30, 2003 (the previous first quarter).

Demands for Kyocera’s components business such as Fine Ceramics Group and Electronic Device Group were strong supported by the favorably increased production activities. As favorable market environment has spurred an increase in production volume and a decline in prices for components has not been intense, sales of Kyocera’s components business has increased significantly in the first quarter compared with the previous first quarter. Sales of Equipment Group have increased due mainly to increased sales of mobile handsets in the U. S. and information equipment.

As a result, consolidated net sales for the first quarter amounted to ¥293.1 billion, an increase of 15.8% compared with the previous first quarter.

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2) Profit

The effect of an increase in sales coupled with a considerable growth in component production volume resulted in an improvement of production efficiencies. Group-wide structural reforms implemented in the previous fiscal year that aimed to improve operating profitability also began to show positive effects in the first quarter. Consequently, profit from operations for the first quarter increased approximately 2.7 times compared with the previous first quarter. Income before income taxes increased to ¥38.1 billion, approximately 2.3 times, while net income increased to ¥22.0 billion, approximately 2.0 times compared with the previous first quarter, respectively.

3) Effect of Exchange Rate Fluctuations

The yen appreciated 8 yen against the U.S. dollar and 3 yen against Euro compared with the average exchange rates in the previous first quarter, respectively. Consequently, net sales after translation into yen were negatively affected by approximately ¥10.5 billion compared with the previous first quarter. Also, income before income taxes after translation into yen was negatively affected by approximately ¥2.4 billion compared with the previous first quarter.

(3) Operating Highlights

Kinseki, Ltd. (Kinseki), a wholly-owned subsidiary, and Kyocera Corporation re-organized the operations related to crystal components on April 1, 2004. Kinseki’s marketing division was merged into the marketing division of the electronic component of Kyocera Corporation and the manufacturing division of crystal related components of Kyocera Corporation was transferred to Kinseki. At the same time, Kinseki changed its name to Kyocera Kinseki Corporation (Kyocera Kinseki).

On April 1, 2004, Kyocera integrated the organic material components business into Kyocera SLC Technologies Corporation (KST), a wholly owned subsidiary. Management resources relating to the organic material components business were concentrated in KST to enhance the synergistic effects within Kyocera and to expand the business base.

On May 18, 2004, Kyocera announced that a new factory would be built in the City of Ayabe, Kyoto Prefecture. The new factory would have three floors high with a total floor area of 25,200 m². Operations are expected to commence in June 2005. At the factory, KST plans to produce semiconductor organic packages and laminated high-density printed circuit boards used in micro processors and chipsets for digital consumer products. Planned investment in the factory will amount to approximately ¥17.0 billion in total.

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On May 21, 2004, Kyocera reached an agreement with Kobe Steel, Ltd. (Kobe Steel) to merge the medical material operations of both companies into a successor company, Japan Medical Materials Corporation, which will be established on September 1, 2004. As a dedicated manufacturer of medical materials, a successor company will benefit from the integration of the specialized expertise of Kyocera and Kobe Steel in material processing technologies, while maximizing synergies by integrating development, production and marketing divisions. It will also seek to expand its business worldwide.

On June 21, 2004, the Carlyle Group (Carlyle), Kyocera, KDDI Corporation (KDDI) and DDI Pocket, Inc. (DDI Pocket) reached an agreement that a consortium of Kyocera and Carlyle would acquire the business of DDI Pocket, a subsidiary of KDDI. Under the agreement, the company that succeeds DDI Pocket’s business (the “NewCo”) will be 30% owned by Kyocera. In cooperation with NewCo, Kyocera will endeavor to expand sales in its PHS related business by carving out new markets in Japan as well as overseas.

(4) Consolidated Operating Segments

(Yen in millions)


	Three Months Ended June 30,				Increase (Decrease) (%)
	2004		2003		Increase (Decrease) (%)
Net sales	293,143		253,126		15.8
Fine Ceramics Group	72,591		56,664		28.1
Electronic Device Group	70,068		55,835		25.5
Equipment Group	130,321		122,650		6.3
Others	25,926		21,156		22.5
Adjustments and eliminations	(5,763	)	(3,179	)	—

Operating profit	33,911		14,885		127.8
Fine Ceramics Group	11,591		4,681		147.6
Electronic Device Group	11,528		1,309		780.7
Equipment Group	7,904		7,350		7.5
Others	2,888		1,545		86.9
Corporate	4,031		764		427.6
Equity in earnings of affiliates and unconsolidated subsidiaries	127		733		(82.7	)
Adjustments and eliminations	(7	)	60		—
Income before income taxes	38,062		16,442		131.5

Commencing in the third quarter of the fiscal year ended March 31, 2004 (October to December 2003), net sales and operating profit of Precision Machine Division of Kyocera Corporation, previously included within “Others,” have been charged to “Corporate.” Accordingly, previously reported net sales and operating profit of operating segment for the previous first quarter were restated.

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1) Fine Ceramics Group

Demand for fine ceramic parts was strong, particularly for semiconductor and LCD fabrication equipment and sapphire substrates for LEDs. In semiconductor parts, sales of ceramic packages especially applicable for mobile handsets and digital consumer products increased appreciably. Sales of cutting tools and solar energy products also increased. Operating profit in this segment rose markedly in the first quarter, increasing approximately 2.5 times compared with the previous first quarter. Primary attributable factors were the effect of sales increases and the effects of cost reduction through expanded production in China, notably of semiconductor parts.

2) Electronic Device Group

Overall sales in this segment grew due primarily to strong performances from ceramic capacitors and crystal related components driven by an increase in component demand. In addition to sales contribution since the start of the fiscal year from Kyocera Kinseki, which became a consolidated subsidiary in August 2003, sales at AVX Corporation, a U.S. subsidiary, increased remarkably. Strong sales, improved rate of operation and the absence of restructuring charges that were recorded in the previous first quarter culminated in an approximately 8.8 times increase in operating profit.

3) Equipment Group

Sales of information equipment rose as Kyocera Mita Group secured major new customers and expanded its product line-up. Despite sluggish sales of mobile phones in Japan due mainly to the product line-up consisted mainly of stayed models, sales at KYOCERA WIRELESS CORP., a U.S. subsidiary, increased. As a result, sales of telecommunications equipment increased. Operating profit in this segment increased, due predominantly to improved margins of information equipment business, including successful product cost reduction by standardizing engines and components for printers and multi-function products.

4) Others

Sales and operating profits in this operating segment increased due to favorable results of Kyocera Chemical Corporation, especially in its business of flexible printed circuits materials and epoxy molding compounds for semiconductor packages, and favorable results at Kyocera Communication Systems Co., Ltd. (KCCS), especially in its data center business, network optimizing business and telecommunications engineering business.

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(5) Orders and Production (Consolidated)

(Yen in millions)


	Three Months Ended June 30,				Increase (Decrease) (%)
	2004		2003		Increase (Decrease) (%)
Orders	313,678		262,749		19.4
Fine Ceramics Group	76,387		59,846		27.6
Electronic Device Group	74,607		56,722		31.5
Equipment Group	141,614		126,542		11.9
Others	27,192		22,641		20.1
Adjustments and eliminations	(6,122	)	(3,002	)	—

Production	302,083		256,778		17.6
Fine Ceramics Group	74,724		57,877		29.1
Electronic Device group	73,840		57,563		28.3
Equipment Group	135,732		127,030		6.9
Others	17,787		14,308		24.3

(6) Geographic Segments (Consolidated)

(Yen in millions)


	Three Months Ended June 30,		Increase (Decrease) (%)
	2004	2003	Increase (Decrease) (%)
Sales	293,143	253,126	15.8
Japan	101,602	98,854	2.8
The United States	67,266	59,000	14.0
Asia	59,011	45,729	29.0
Europe	41,244	36,972	11.6
Others	24,020	12,571	91.1

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<Japan>

Sales increased compared with the previous first quarter due to a strong performance from the components business, notably Electronic Device Group and Fine Ceramics Group, and sales growth in information equipment, optical instruments and KCCS.

Sales increased considerably due to higher sales of mobile handsets and an improvement in the market environment surrounding the components business.

<Asia>

Sales in the previous first quarter were adversely affected by a slowdown in production activities in electronic industries in Asia caused by Severe Acute Respiratory Syndrome (“SARS”). The absence of such a factor in the first quarter resulted in a significant increase in component sales, and thus a striking increase in regional sales.

Sales grew considerably due primarily to an increase in sales of information equipment and electronic devices.

2. Cash flows

Cash and cash equivalents at June 30, 2004 decreased by ¥93,331 million to ¥267,801 million compared with March 31, 2004.

(Yen in millions)


	Three Months Ended June 30,
	2004		2003
Cash flows from operating activities	26,812		6,919
Cash flows from investing activities	(114,211	)	2,841
Cash flows from financing activities	(7,576	)	(9,391	)
Effect of exchange rate changes on cash and cash equivalents	1,644		953
Net (decrease) increase in cash and cash equivalents	(93,331	)	1,322
Cash and cash equivalents at beginning of period	361,132		298,310
Cash and cash equivalents at end of period	267,801		299,632

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1)	Cash Flows from Operating Activities

Net cash provided by operating activities in the first quarter increased by ¥19,893 million to ¥26,812 million from the previous first quarter of ¥6,919 million. This was due mainly to an increase in net income by ¥11,252 million to ¥21,982 million and a decrease in receivables.

2)	Cash Flows from Investing Activities

Net cash used in investing activities in the first quarter increased by ¥117,052 million to ¥114,211 million from net cash provided in the previous first quarter of ¥2,841 million. This was due mainly to increases in purchases of the government bonds and negotiable certificate of deposits (CD) in consideration of current and future financial position according to our investment policy.

3)	Cash Flows from Financing Activities

Net cash used in financing activities in the first quarter decreased by ¥1,815 million to ¥7,576 million from the previous first quarter of ¥9,391 million. This was due mainly to an increase in short-term debt.

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3. Consolidated Financial Forecast for the Year Ending March 31, 2005 (described in Form 6-K filed on April 27, 2004)

There is no revision of our initial forecast for the fiscal year ending March 31, 2005, and detailed forecast of the previously described is as follows

(Yen in millions, except per share amounts and exchange rate)


	The fiscal year ending March 31, 2005 (Forcast)	Increase (Decrease) (%) compared with the fiscal year ended March 31, 2004
Net sales	1,260,000	10.4
Profit from operations	135,000	23.9
Income before income taxes	140,000	21.7
Net income	85,000	24.8
Diluted earnings per share	455.40	—
US$ average exchange rate	100	—
Euro average exchange rate	123	—

Note: 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, including in particular China; changes in exchange rates, particularly between the yen and the U.S. dollar and Euro, respectively, in which we make significant sales; our ability to launch innovative products and otherwise meet the advancing technical requirements of our customers, particularly in the highly competitive markets for ceramics, semiconductor parts and electronic components; the extent and pace of future growth or contraction in information technology-related markets around the world, including those for communications and personal computers; and events that may impact negatively on our markets or supply chain, including terrorist acts and outbreaks of diseases such as SARS. 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)								(Unaudited)
	June 30, 2004				March 31, 2004				June 30, 2003
	Amount			%	Amount			%	Amount			%
Current assets :
Cash and cash equivalents	¥	267,801			¥	361,132			¥	299,632
Restricted cash		—				—				58,321
Short-term investments		70,470				3,855				15,641
Trade notes receivable		39,558				33,801				39,104
Trade accounts receivable		192,215				207,583				167,350
Short-term finance receivables		71,494				70,553				60,365
Less allowances for doubtful accounts and sales returns		(9,113	)			(8,468	)			(7,452	)
Inventories		219,836				197,194				194,135
Deferred income taxes		36,243				34,957				51,742
Other current assets		35,014				33,089				25,346

Total current assets		923,518		50.4		933,696		52.0		904,184		53.2

Non-current assets :
Investments in and advances to affiliates and unconsolidated subsidiaries		23,880				24,054				24,783
Securities and other investments		484,585				430,096				359,419

Total investments and advances		508,465		27.7		454,150		25.3		384,202		22.6
Long-term finance receivables		82,762		4.5		88,512		5.0		99,269		5.8
Property, plant and equipment, at cost :
Land		54,905				54,867				54,069
Buildings		220,535				217,216				203,423
Machinery and equipment		631,380				622,721				590,459
Construction in progress		6,802				10,384				7,095
Less accumulated depreciation		(661,480	)			(650,668	)			(604,912	)

		252,142		13.8		254,520		14.2		250,134		14.7

Goodwill		25,531		1.4		25,254		1.4		25,805		1.5
Intangible assets		18,403		1.0		16,645		0.9		13,792		0.8
Other assets		22,569		1.2		21,981		1.2		22,634		1.4

Total non-current assets		909,872		49.6		861,062		48.0		795,836		46.8

Total assets	¥	1,833,390		100.0	¥	1,794,758		100.0	¥	1,700,020		100.0

Note 1:

Restricted cash represents the amount of the time deposit to a financial institution in order to reduce the cost for the issuance of letter of credit in connection with the litigation against LaPine. Kyocera Corporation withdrew all restricted cash because Kyocera Corporation reached agreement to settle all claims in pending litigation on December 22, 2003 (U.S. time).

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	Yen in millions
	(Unaudited)								(Unaudited)
	June 30, 2004				March 31, 2004				June 30, 2003
	Amount			%	Amount			%	Amount			%
Current liabilities :
Short-term borrowings	¥	105,488			¥	84,815			¥	111,600
Current portion of long-term debt		22,770				44,522				42,513
Trade notes and accounts payable		106,510				110,759				93,588
Other notes and accounts payable		34,092				38,115				32,635
Accrued payroll and bonus		42,707				34,161				41,614
Accrued income taxes		19,938				19,054				9,726
Accrued litigation expenses		—				—				42,112
Other accrued expenses		27,072				28,665				22,943
Other current liabilities		15,806				16,548				15,518

Total current liabilities		374,383		20.4		376,639		21.0		412,249		24.2

Non-current liabilities :
Long-term debt		69,813				70,608				40,451
Accrued pension and severance costs		36,194				38,620				74,909
Deferred income taxes		105,756				95,498				51,266
Other non-current liabilities		6,174				6,409				4,644

Total non-current liabilities		217,937		11.9		211,135		11.7		171,270		10.1

Total liabilities		592,320		32.3		587,774		32.7		583,519		34.3

Minority interests in subsidiaries		54,697		3.0		53,238		3.0		62,579		3.7
Stockholders’ equity :
Common stock		115,703				115,703				115,703
Additional paid-in capital		162,088				162,091				167,675
Retained earnings		901,620				885,262				833,531
Accumulated other comprehensive income		38,247				22,046				(10,940	)
Treasury stock, at cost		(31,285	)			(31,356	)			(52,047	)

Total stockholders’ equity		1,186,373		64.7		1,153,746		64.3		1,053,922		62.0

Total liabilities, minority interests and stockholders’ equity	¥	1,833,390		100.0	¥	1,794,758		100.0	¥	1,700,020		100.0

Note 2: Accumulated other comprehensive income is as follows:


	Yen in millions
	June 30, 2004			March 31, 2004			June 30, 2003
Net unrealized gains on securities	¥	71,738		¥	59,241		¥	11,117
Net unrealized gains (losses) on derivative financial instruments	¥	15		¥	(48	)	¥	(268	)
Minimum pension liability adjustments	¥	(1,477	)	¥	(1,477	)	¥	(10,931	)
Foreign currency translation adjustments	¥	(32,029	)	¥	(35,670	)	¥	(10,858	)

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CONSOLIDATED STATEMENTS OF INCOME(Unaudited)


	Yen in millions, except per share amounts
	Three months ended June 30,										Increase (Decrease)
	2004					2003					Increase (Decrease)
	Amount			%		Amount			%		Amount			%
Net sales	¥	293,143		100.0		¥	253,126		100.0		¥	40,017		15.8
Cost of sales		205,508		70.1			189,539		74.9			15,969		8.4

Gross profit		87,635		29.9			63,587		25.1			24,048		37.8

Selling, general and administrative expenses		52,884		18.0			50,789		20.0			2,095		4.1

Profit from operations		34,751		11.9			12,798		5.1			21,953		171.5

Other income or expenses :
Interest and dividend income		2,056		0.7			1,635		0.6			421		25.7
Interest expense		(326	)	(0.1	)		(361	)	(0.1	)		35		—
Foreign currency transaction gains, net		399		0.1			1,253		0.5			(854	)	(68.2	)
Equity in earnings of affiliates and unconsolidated subsidiaries		127		0.0			733		0.3			(606	)	(82.7	)
Other, net		1,055		0.4			384		0.1			671		174.7

Total other income or expenses		3,311		1.1			3,644		1.4			(333	)	(9.1	)

Income before income taxes and minority interests		38,062		13.0			16,442		6.5			21,620		131.5
Income taxes		15,107		5.2			6,294		2.5			8,813		140.0

Income before minority interests		22,955		7.8			10,148		4.0			12,807		126.2

Minority interests		(973	)	(0.3	)		582		0.2			(1,555	)	—

Net income	¥	21,982		7.5		¥	10,730		4.2		¥	11,252		104.9

Earnings per share:
Net income:
Basic	¥	117.25				¥	58.01
Diluted	¥	117.17				¥	58.01
Weighted average number of shares of common stock outstanding (shares in thousands) :
Basic		187,491					184,963
Diluted		187,612					184,963

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Notes:

Kyocera applies the Statement of Financial Accounting Standards (SFAS) No.130, ”Financial Reporting of Comprehensive Income.” Based on this standard, comprehensive income for the three months ended June 30, 2004 and 2003 was an increase of 38,183 million yen and an increase of 55,984 million yen, 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 exercised or converted into common stock or resulted in the issuance of common stock.

- 15 -

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, at cost			Comprehensive income
Balance, March 31, 2003 (184,964)	¥	115,703	¥	167,675		¥	828,350		¥	(56,194	)	¥	(52,034	)

Net income for the year							68,086								¥	68,086
Other comprehensive income										78,240						78,240

Total comprehensive income for the year															¥	146,326

Cash dividends							(11,174	)
Purchase of treasury stock (14)													(105	)
Reissuance of treasury stock (5)				4									44
Allocation of treasury stock for share exchange (2,529)				(5,607	)								20,739
Stock option plan of a subsidiary				19

Balance, March 31, 2004 (187,484)		115,703		162,091			885,262			22,046			(31,356	)

(Unaudited)
Net income for the period							21,982								¥	21,982
Other comprehensive income										16,201						16,201

Total comprehensive income for the period															¥	38,183

Cash dividends							(5,624	)
Purchase of treasury stock (4)													(34	)
Reissuance of treasury stock (13)				(3	)								105

Balance, June 30, 2004 (187,493)	¥	115,703	¥	162,088		¥	901,620		¥	38,247		¥	(31,285	)


	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, at cost			Comprehensive income
Balance, March 31, 2003 (184,964)	¥	115,703	¥	167,675	¥	828,350		¥	(56,194	)	¥	(52,034	)

(Unaudited)
Net income for the period						10,730								¥	10,730
Other comprehensive income									45,254						45,254

Total comprehensive income for the period														¥	55,984

Cash dividends						(5,549	)
Purchase of treasury stock (2)												(13	)

Balance, June 30, 2003 (184,962)	¥	115,703	¥	167,675	¥	833,531		¥	(10,940	)	¥	(52,047	)

- 16 -

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Yen in millions
	Three months ended June 30,
	2004			2003
Cash flows from operating activities:
Net income	¥	21,982		¥	10,730
Adjustments to reconcile net income to net cash provided by operating activities :
Depreciation and amortization		15,244			16,086
Losses on inventories		2,637			1,216
Foreign currency adjustments		(260	)		(1,230	)
Decrease in receivables		16,064			6,900
Increase in inventories		(24,753	)		(9,221	)
Increase in other current assets		(1,692	)		(2,495	)
Decrease in notes and accounts payable		(7,220	)		(7,141	)
Other, net		4,810			(7,926	)

Net cash provided by operating activities		26,812			6,919

Cash flows from investing activities :
Payments for purchases of securities		(51,255	)		(13,408	)
Payments for purchases of investments and advances		(173	)		(86	)
Sales and maturities of securities		10,610			30,240
Payments for purchases of property, plant and equipment, and intangible assets		(15,559	)		(12,148	)
Proceeds from sales of property, plant and equipment, and intangible assets		1,102			569
Acquisitions of businesses, net of cash acquired		—			45
Negotiable Certificate of Deposits		(59,000	)		—
Restricted cash		—			(1,994	)
Other, net		64			(377	)

Net cash (used in) provided by investing activities		(114,211	)		2,841

Cash flows from financing activities :
Increase in short-term debt		20,617			3,499
Proceeds from issuance of long-term debt		3,418			463
Payments of long-term debt		(26,049	)		(8,506	)
Dividends paid		(5,736	)		(5,363	)
Net purchases of treasury stock		67			(14	)
Other, net		107			530

Net cash used in financing activities		(7,576	)		(9,391	)

Effect of exchange rate changes on cash and cash equivalents		1,644			953

Net (decrease) increase in cash and cash equivalents		(93,331	)		1,322
Cash and cash equivalents at beginning of period		361,132			298,310

Cash and cash equivalents at end of period	¥	267,801		¥	299,632

- 17 -

SEGMENT INFORMATION (Unaudited)

1. Operating segments :


	Yen in millions
	Three months ended June 30,						Increase (Decrease)
	2004			2003			Increase (Decrease)
	Amount			Amount			Amount			%
Net sales :
Fine Ceramics Group	¥	72,591		¥	56,664		¥	15,927		28.1
Electronic Device Group		70,068			55,835			14,233		25.5
Equipment Group		130,321			122,650			7,671		6.3
Others		25,926			21,156			4,770		22.5
Adjustments and eliminations		(5,763	)		(3,179	)		(2,584	)	—

	¥	293,143		¥	253,126		¥	40,017		15.8

Operating profit :
Fine Ceramics Group	¥	11,591		¥	4,681		¥	6,910		147.6
Electronic Device Group		11,528			1,309			10,219		780.7
Equipment Group		7,904			7,350			554		7.5
Others		2,888			1,545			1,343		86.9

		33,911			14,885			19,026		127.8

Corporate		4,031			764			3,267		427.6
Equity in earnings of affiliates and unconsolidated subsidiaries		127			733			(606	)	(82.7	)
Adjustments and eliminations		(7	)		60			(67	)	—

Income before income taxes	¥	38,062		¥	16,442		¥	21,620		131.5

Depreciation and amortization :
Fine Ceramics Group	¥	3,882		¥	3,744		¥	138		3.7
Electronic Device Group		5,030			5,575			(545	)	(9.8	)
Equipment Group		4,410			4,924			(514	)	(10.4	)
Others		1,312			1,240			72		5.8
Corporate		610			603			7		1.2

Total	¥	15,244		¥	16,086		¥	(842	)	(5.2	)

Capital expenditures :
Fine Ceramics Group	¥	3,208		¥	2,808		¥	400		14.2
Electronic Device Group		4,422			5,504			(1,082	)	(19.7	)
Equipment Group		3,390			4,891			(1,501	)	(30.7	)
Others		374			278			96		34.5
Corporate		417			666			(249	)	(37.4	)

Total	¥	11,811		¥	14,147		¥	(2,336	)	(16.5	)

- 18 -

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


	Yen in millions
	Three months ended June 30,						Increase (Decrease)
	2004			2003			Increase (Decrease)
	Amount			Amount			Amount			%
Net sales:
Japan	¥	120,890		¥	114,719		¥	6,171		5.4
Intra-group sales and transfer between geographic areas		82,052			62,000			20,052		32.3

		202,942			176,719			26,223		14.8

United States of America		86,418			67,020			19,398		28.9
Intra-group sales and transfer between geographic areas		6,340			6,377			(37	)	(0.6	)

		92,758			73,397			19,361		26.4

Asia		39,057			29,252			9,805		33.5
Intra-group sales and transfer between geographic areas		30,603			23,068			7,535		32.7

		69,660			52,320			17,340		33.1

Europe		42,232			37,621			4,611		12.3
Intra-group sales and transfer between geographic areas		8,818			7,729			1,089		14.1

		51,050			45,350			5,700		12.6

Others		4,546			4,514			32		0.7
Intra-group sales and transfer between geographic areas		2,239			1,593			646		40.6

		6,785			6,107			678		11.1

Adjustments and eliminations		(130,052	)		(100,767	)		(29,285	)	—

	¥	293,143		¥	253,126		¥	40,017		15.8

Operating profit:
Japan	¥	27,078		¥	19,121		¥	7,957		41.6
United States of America		5,643			(1,797	)		7,440		—
Asia		4,787			917			3,870		422.0
Europe		139			(1,999	)		2,138		—
Others		452			176			276		156.8

		38,099			16,418			21,681		132.1
Adjustments and eliminations		(4,195	)		(1,473	)		(2,722	)	—

		33,904			14,945			18,959		126.9

Corporate		4,031			764			3,267		427.6
Equity in earnings of affiliates and unconsolidated subsidiaries		127			733			(606	)	(82.7	)

Income before income taxes	¥	38,062		¥	16,442		¥	21,620		131.5

- 19 -

3. Geographic segments (Sales by region) :


	Yen in millions
	Three months ended June 30,								Increase (Decrease)
	2004				2003				Increase (Decrease)
	Amount			%	Amount			%	Amount		%
Japan	¥	101,602		34.7	¥	98,854		39.1	¥	2,748	2.8
United States of America		67,266		22.9		59,000		23.3		8,266	14.0
Asia		59,011		20.1		45,729		18.0		13,282	29.0
Europe		41,244		14.1		36,972		14.6		4,272	11.6
Others		24,020		8.2		12,571		5.0		11,449	91.1

Net sales	¥	293,143		100.0	¥	253,126		100.0	¥	40,017	15.8

Sales outside Japan	¥	191,541			¥	154,272			¥	37,269	24.2
Sales outside Japan ratio to net sales		65.3	%			60.9	%

- 20 -

July 29, 2004


Name of Company listed:		Kyocera Corporation

Name of Representative:		Yasuo Nishiguchi, President and Director

		(Code number: 6971,
		The First Section of the Tokyo Stock Exchange,
		The First Section of the Osaka Securities Exchange)

Person for inquiry:		Hideki Ishida
		Managing Executive Officer
		(Tel: 075-604-3500)

Re: Consolidated Financial Results

for the Three Months Ended June 30, 2004 (Information purposes only)

As set forth in the earnings digest relating to the fiscal year ended March, 31, 2004 (described in Form 6-K filed on April, 27, 2004), with effect from the fiscal year ending March, 31, 2005, Kyocera has been publicly announcing financial forecasts for full fiscal years only.

The consolidated income before income taxes and net income for the three months ended June 30, 2004 as announced today have already exceeded the consolidated income before income taxes and net income for the six months ended September 30, 2003 by 51.5% and 39.5%, respectively. Accordingly, Kyocera hereby announces them for Timely Disclosure.

Kyocera does not revise the consolidated financial forecast for the fiscal year ending March 31, 2005, which was described in Form 6-K filed on April 27, 2004 as follows:


	Financial forecast for the fiscal year ending March 31, 2005 (yen in millions)	Increase or decrease (%) compared with the fiscal year ended March 31, 2004
Net Sales	1,260,000	10.4
Income before Income Taxes	140,000	21.7
Net Income	85,000	24.8

Note: Forward-Looking Statements

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