UPDATE 1-Nippon Telegraph op profit seen at JPY1.1 trln - Nikkei

May 9 (Reuters) - Nippon Telegraph and Telephone Corp (9432.T: Quote, Profile, Research) is expected to report a group operating profit of roughly 1.1 trillion yen for fiscal 2008, down 16 percent from the year before and nearly in line with an earlier outlook, the Nikkei business daily said.

With Toyota Motor Corp (7203.T: Quote, Profile, Research) slipping into the red, the telecommunications giant is now set to reclaim the No. 1 spot among listed companies in terms of operating profit after a six-year hiatus, the daily said without citing sources.

The drop in operating profit stems from a boost the firm enjoyed in fiscal 2007 on 317.6 billion yen gain from returning a portion of pension assets to the government, it said.

Nikkei said excluding special factors, operating profit was mostly flat and this was largely due to a 3 percent uptick in operating profit at cellular phone service unit NTT DoCoMo Inc (9437.T: Quote, Profile, Research).

Despite cell phone sales slumping more than 20 percent in unit terms, DoCoMo enjoyed an increase in operating profit because of reduced commission fees paid to sales agents, the paper said. (Reporting by Ashutosh Joshi in Bangalore; Editing by Jarshad Kakkrakandy)