(RTTNews) - Internet Initiative Japan Inc. (IIJI: News ), a provider of internet connectivity and network solutions, late Monday reported a 6.7% increase in profit for the first quarter from last year, helped by foreign exchange gains in addition to lower interest expenses and narrower losses on write-down of investments as compared to the year-ago period. Revenue for the quarter declined 3%.

Looking ahead, the company reiterated its earnings and revenue outlook for the first half of 2009 and the full year.

The Tokyo, Japan-based Internet Initiative Japan, or IIJ, said that net income for the first quarter attributable to the company increased to 180.48 million yen, or US$1.87 million, from 169.08 million yen in the previous-year quarter.

Net income attributable to IIJ per share for the first quarter was 891.06 yen, or US$9.24, compared to 818.39 yen in the year-ago quarter. Net income attributable to IIJ per ADS for the quarter was 2.23 yen, or US$0.02, up from 2.05 yen in the same period last year.

Total revenues for the quarter declined 3% to 15.84 billion yen, or US$164.22 million, from 16.33 billion yen in the prior-year quarter.

The company stated that while recurring revenues for the quarter increased 6.4% from last year and accounted for 87.7% of revenue for the latest quarter, revenue from systems construction declined due to weak IT related investments in Japan.
Koichi Suzuki, president and chief executive officer commented, "In an economic environment that continues to remain challenging, our operating income was above our original target largely because operating income from connectivity and outsourcing service and SI increased along with the increase in recurring revenues and the continuous tight cost control, while operating loss related to our ATM operation business increased as it is still in its course of business start up."

Connectivity and outsourcing services revenues for the quarter increased 8.7% from the year-ago period to 9.13 billion yen. Systems integration revenues declined 14.6% from the prior-year period to 6.56 billion yen and revenues from equipment sales dropped 42.6% to 136.58 million yen.

Total costs and expenses for the quarter were 15.48 billion yen, or US$160.59 million, down from 15.92 billion yen in the previous year.

Operating income for the quarter declined 14.7% to 350.88 million yen, or US$3.64 million, from 411.26 million yen in the year-ago period, due to increase in the operating loss related to the company's new ATM operation business of 165 million yen year-over-year. Meanwhile, operating income from connectivity and outsourcing service and SI increased 21.9% to 584 million yen.

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