By NEC Press Release

Tokyo  – NEC Corporation today announced revisions to its full-year consolidated financial forecasts and recording of extraordinary loss for the fiscal year ended March 31, 2009.

1.Revision of consolidated financial forecasts for the fiscal year ended March 31, 2009 (April 2008 – March 2009)

 

(In billions of yen)

  Sales Operating income(loss) Ordinary income(loss) Net income(loss)
Forecast as of January 30, 2009 (A) 4,200.0 -30.0 -90.0 -290.0
Forecast as of May 8, 2009 (B) 4,216.0 -6.0 -93.0 -297.0
Difference (B-A) +16.0 +24.0 -3.0 -7.0
Change (%) 0.4 ? ? ?
(For reference) Results for the previous fiscal year (April 2007 – March 2008) 4,617.2 156.8 112.2 22.7

 

2. Reasons for revisions of financial forecasts

NEC forecasts an operating loss of 6.0 billion yen, 24.0 billion yen less than the previous forecast mainly due to an improvement in the IT/Network Solution business. Despite an improvement of operating loss, NEC expects an ordinary loss of 93.0 billion yen, a decrease of 3.0 billion yen as compared with the previous forecasts, due to an increase in non-operating loss as a result of allowance of possible expenses related to matters in litigation.

NEC expects a net loss of 297 billion yen, a drop of 7.0 billion yen as compared with the previous forecasts, as a result of worsening ordinary loss and an increase in extraordinary loss such as business structure improvement expenses.

3. Details of Recording Extraordinary loss

NEC forecasts an extraordinary loss of approximately 218.0 billion yen in its consolidated statements of income. Details of the extraordinary loss are as follows:

 

A. Business structure improvement expenses Approximately 87.0 billion yen
  NEC will record mainly early retirement costs of employees in the Electron Devices business and dismissal costs of employees in the Mobile/Personal Solutions business outside of Japan.
B. Loss on valuation of investment securities Approximately 79.0 billion yen
  NEC will record impairment loss on investment securities due to the drastic devaluation of their market values, which may not recover in the future.
C. Impairment loss Approximately 30.0 billion yen
  NEC will record impairment loss on fixed assets for unprofitable businesses and goodwill which may not recover in the future.
D. Provision for loss on guarantees Approximately 15.0 billion yen
  Due to the deterioration of financial conditions of affiliated companies, to which NEC guaranties their liabilities, NEC will record a provision for loss on guarantees.

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