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  • NEC Posts April-Sept. Consolidated Net Loss of 19.7B Yen
  • October 28, 1998 (TOKYO) -- NEC Corp. announced that its consolidated sales in the April-September term registered 2,113 billion yen (US$17.75 billion), down 11 percent year on year, with a pretax loss of 24.5 billion yen (US$205.8 million) and a net loss of 19.7 billion yen (US$165.5 million).
    This is the company's first set of midterm results that entailed losses since September 1993.

    NEC cited the sluggishness in the microchip market as one of the reasons for the losses. As a result of a series of scandals involving Defense Agency procurement, NEC has been barred by prefectural governments and central government agencies from bidding for public works contracts and from supplying them with its products. Asked if that affected its business results, a company spokesman only said, "sales of NEC's products have deteriorated."

    A breakdown of the half-year business results by divisions shows that sales declined in nearly all major business areas.

    Sales of the electron devices division fell 18.3 percent compared with the same term a year ago to 431,238 million yen (US$3.62 billion) due mainly to the recession in the semiconductor market.

    Sales of NEC's communication systems and equipment division fell 13.7 percent to 712,353 million yen (US$5.98 billion), while sales of the computer and industrial electronic systems division declined 3.9 percent to 879,361 million yen (US$7.39 billion).

    Sluggish sales of personal computers was the main cause of the poor business in the computer and industrial electronics systems division. NEC blamed it on the decline in demand for PCs among small and midsize enterprises.

    In areas other than PCs, shipments of main server models exceeded the year-ago level. Shipments of the Express5800 Server registered 27,500 units, an increase of 21 percent from a year earlier while shipments of the NX7000 jumped 71 percent to 650 units. In the computer division, however, the sluggishness in PC shipments hurt the overall picture, despite the good results of non-PC divisions.

    In announcing the midterm results, NEC also disclosed its business prospects for fiscal 1998. Consolidated sales for the current fiscal year ending March 1999 are expected to reach 4.9 trillion yen (US$41.16 billion), about the same as in fiscal 1997, while its pretax loss is estimated at 35 billion yen (US$294 million) and net loss also at 35 billion yen.

    In fiscal 1998, NEC will likely register a consolidated loss for the first time since 1992.

    More information in English is available at: http://www.nec.co.jp/english/today/newsrel/9810/2301.html

    Related story: NEC Estimates 20B-Yen Consolidated Loss for First Half FY98

    (BizTech News Center)

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    Updated: Tue Oct 27 18:39:28 1998 PDT