Softbank Corp. (9984.TO) said Thursday its net profit for the July-September quarter nearly doubled from a year earlier, thanks mainly to the popularity of the iPhone, which helped eliminate cumulative losses carried for the past seven years.

The telecom and network services company and provider of Apple Inc.'s iPhone in Japan also raised its capital spending projection to Y260 billion from a previously forecast Y220 billion for this fiscal year through March to increase data capacity for increased traffic.

"Because the shipment of the iPhone is extremely strong, data traffic increased accordingly," said President Masayoshi Son. He added that the company plans to make bigger capital investments next fiscal year.

Son didn't disclose shipment volume of the iPhone, but said it has "more than doubled since last year."

Net profit for the quarter rose to Y43.37 billion from Y21.75 billion in the same period a year earlier. Softbank said its overall handset sales increased during the quarter, even though the domestic mobile phone market is saturated.

The result surpassed the Y30 billion mean estimate in a survey of 14 analysts by Thomson Reuters.

"In order to retain subscribers' satisfaction level, it makes sense that the company is investing in data capacity expansion," said Yuusuke Tsunoda, analyst at Tokai Tokyo Research Center. "Its profit growth is impressive."

Due to aggressive investment in its ADSL business, Softbank's cumulative losses started weighing on the bottom line from the fiscal year ended March 2003, peaking at Y273 billion in the fiscal year ended March 2005. Retained earnings turned positive for the first time in seven years as of Sept. 30, posting Y17.16 billion, compared with a loss of Y51.27 billion a year earlier.

Operating profit for the three months rose 29% to Y122.33 billion from Y94.91 billion on revenue of Y682.94 billion, up from Y681.74 billion a year ago.

Average revenue per user for its mobile phone services fell to Y4,150 per month in the quarter, from Y4,170 a year earlier. The net increase in subscribers was 360,700 from 521,400.

For the fiscal year ending March 2010, Softbank continues to expect an operating profit of Y420 billion, up 16.9% on year from Y359.12 billion.

"I am very confident that we are likely to meet the forecast," Son said.

The company didn't issue a net profit outlook for the full fiscal year.

Its earnings are based on Japanese accounting standards.

-By Ayai Tomisawa, Dow Jones Newswires, 813-6895-7568, ayai.tomisawa@dowjones.com