NEC
Home Press Release Index

Main Content
Press Release

*****For immediate use September 28th, 2001

Announcement of the Revised Financial Results Forecast and Dividend Forecast



TOKYO September 28th, 2001 - NEC Corporation (NEC) (NASDAQ: NIPNY, FTSE: 6701q.l, TSE: 6701) announced today, its revised financial results forecast for the first half of this fiscal year ending September 30, 2001 and the fiscal year ending March 31, 2002. Dividend per stock forecast revision is also included. Details of the revised results forecast are as follows:


1.Revised consolidated financial results forecasts for the first half of this fiscal year (the six months period ending September 30, 2001)

<Consolidated basis> (Billions of Yen)
Forecast as of... Net sales Income
before income taxes
Net income
July 27, 2001
September 28, 2001
      Difference
      % change
Actual results for the six months period ended September 30, 2000
2,600
2,500
-100
-3.8%
2,478.299

10
-35
-45

35.446

3
-30
-33

20.525



2.Revised consolidated financial results forecasts for the fiscal year ending March 31, 2002

<Consolidated basis> (Billions of Yen)
Forecast as of... Net sales Income
before income taxes
Net income
April 26, 2001
September 28, 2001
      Difference
      % change
Actual results for the fiscal year ended March 31, 2001
5,850
5,340
-510
-8.7%
5,409.736

110
-220
-330

92.323

65
-150
-215

56.603



3. Revised non-consolidated financial results forecasts for the first half of this fiscal year (the six months period ending September 30, 2001)

<Non-Consolidated basis> (Billions of Yen)
Forecast as of... Net sales Ordinary income Net income
April 26, 2001
September 28, 2001
      Difference
      % change
Actual results for the six months period ended September 30, 2000
2,000
1,860
-140
-7.0%
1,865.591

15
0
-15

33.704

10
2
-8
-80.0%
6.117



4. Revised non-consolidated financial results forecasts for the fiscal year ending March 31, 2002

<Non-Consolidated basis> (Billions of Yen)
Forecast as of... Net sales Ordinary income Net income
April 26, 2001
September 28, 2001
      Difference
      % change
Actual results for the fiscal year ended March 31, 2001
4,400
3,700
-700
-15.9%
4,099.323

70
-30
-100

63.917

30
-100
-130

23.670



5. Background to NEC Corporation's Revised Financial Results Forecasts

NEC has been in confrontation with decreasing information technology ("IT") related investments, which has continued to darken the stock market and confirm the foreseen recession since NEC announced its first quarter financial results and the revised first half forecasts on July 27 2001. Moreover, the September 11th terrorist attacks carried out against the United States of America, has abruptly halted any chance of an early recovery from the American economy. Under this economic environment, the widespread fall of activity in the domestic PC market, a sudden slowdown in the U.S. telecommunications market, and the continuing erosion of prices and lackluster demand for memory related semiconductors has led to business conditions of greater severity than the time of the previous financial results forecasts made in July 2001.

Although NEC has continued to implement group-wide activities to reduce costs and improve business performance, the sudden and continuing erosion of prices and widespread drop in demand has made it necessary to issue today's downward revision to the previously announced financial results forecasts. This poor business performance is seen by NEC as not only a slump in the market, but also more deeply as a structural problem and accordingly, NEC is to plan to execute radical structural reforms. The cost for the planned restructuring has been included in today's forecasts.


6. Details to the Revised Financial Results Forecast

Consolidated financial results
(First half forecasts)
a. Despite stable conditions for the sale of mobile terminals in the domestic market and an increase in domestic demand for NEC's system integration ("SI") service in the corporate, government and public sectors, the difficult situation in the semiconductor memory market, erosion of memory prices and flattening of demand for PCs is expected to result in the sales for the first half of this fiscal year that are 100 billion Yen lower than forecast in July 2001. This is expected to result in consolidated net sales of approximately 2,500 billion Yen (an increase by 1% compared to the same period for the previous fiscal year).
b. Due to the lower consolidated net sales forecast explained above (a decrease by 25 billion Yen compared to the results for the same period in the previous fiscal year, income before income taxes is anticipated to be 45 billion Yen lower than the forecast made in July 2001 at a forecast loss of 35 billion Yen. Accordingly, net income for this period has been revised to be 33 billion Yen lower than the forecast in July at a loss of 30 billion Yen.


(Fiscal year forecasts)
a. While stable growth for NEC's SI service in the corporate, government, and public sectors is expected, the slowdown in the PC and semiconductor market is expected to continue. Accordingly, the sales for the fiscal year ending March 31, 2002 are expected to be 510 billion Yen lower than the forecast in April 2001 at 5,340 billion Yen (-1% compared to the pervious fiscal year).
b. Due to the lower consolidated net sales forecast explained above and the inclusion of the anticipated cost for the restructuring of the semiconductor business, operating income is expected to be 180 billion Yen lower than the forecast made in April 2001, and income before income taxes is anticipated to be loss of 220 billion Yen. Accordingly, net income for this fiscal year has been revised to be 215 billion Yen lower than the forecast in April at a loss of 150 billion Yen.


Non-consolidated financial results
(First half forecasts)
a. Net sales are anticipated to be 140 billion Yen lower than the forecast in April 2001 resulting in expected net sales of 1,860 billion Yen for the first half of this fiscal year (a decrease by 1% compared with the results for the same period in the previous fiscal year).
b. Although due to the lower anticipated net sales mentioned above, ordinary income is expected to be 0 billion Yen (15 billion Yen lower than the forecast in April, 2001), net income for the period including tax effect is expected to reach 2 billion Yen.


(Fiscal year forecasts)
a. Net sales are anticipated to be 700 billion Yen lower than the April 2001 forecast resulting in expected net sales of 3,700 billion Yen (a decrease by 10% compared with the results for the previous fiscal year).
b. Due to the lower than anticipated net sales mentioned above, ordinary income is expected to be a loss of 30 billion Yen (100 billion Yen lower than the forecast in April 2001). Due to the incurred restructuring cost for the semiconductor business, net income for the period is anticipated to be a loss of 100 billion Yen (130 billion Yen lower than that forecast in April 2001).


7.Dividend per stock forecast

Following the above-mentioned revised financial results forecasts, dividend per stock forecast has been revised to 6 Yen per stock (an interim dividend of 3 Yen per stock and a year-end dividend of 3 Yen per stock).

Forecast as of... Interim Dividend Year-end Dividend Year
April 26, 2001
September 28, 2001
Actual results for the fiscal year ended March 31, 2001
5.50
3.00
5.50

5.50
3.00
5.50

11.00
6.00
11.00



***


CAUTIONARY STATEMENTS:

1. The above forecasts are forward-looking statements involving risks and uncertainties. The important factors that could cause actual results to differ materially from such statements include, but are not limited to, general economic conditions in NEC's markets, which are primarily Japan, North America, Asia and Europe; demand for, and competitive pricing pressure on, NEC's products in the marketplace; NEC's ability to continue to win acceptance of its products in these highly competitive markets; and movements of currency exchange rates, particularly the rate between the yen and the U.S. dollar in which NEC makes significant sales. Among other factors, a continuing worsening of financial conditions in the U.S., Japanese and/or European markets, and/or a worsening of the ongoing downturn in the semiconductor and IT markets, would cause actual results to differ from the projected results described above.

2.

In case where the information contained in this press release falls within the definition of "Material Information" under the Securities and Exchange Law of Japan, Article 166, Paragraph 2, if you read this press release before the time of "Publication" (which is defined under the Securities and Exchange Law of Japan and its Enforcement Ordinance as twelve hours after its release; i.e., approximately 2:00 p.m. on September 29, 2001 [JST]), you and the persons listed below may be prohibited from purchasing, selling, or making other transactions of shares of stock or other securities of NEC Corporation before the time of Publication.


-

Other directors or employees of your company if the content of this press release comes to their knowledge in connection with their duty



Contact:
Daniel Mathieson
NEC Corporation
Tel:81-3-3798-6511
Fax:81-3-3457-7249
E-mail:d-mathieson@bu.jp.nec.com
Copyright(C) NEC Corporation
Terms of Use Contact Us