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NEC Revises Full-Year Financial Forecasts

*****For immediate use May 15, 2007

Tokyo, May 15, 2007 --- NEC Corporation today revised its full-year consolidated financial forecasts for the fiscal year ended March 31, 2007, previously disclosed on February 22, 2007.

I. Revised forecasts for full-year financial results

1. Revision of consolidated financial results forecast for the full fiscal year ended March 31, 2007 (April 2006 - March 2007)

(In billions of yen)
  Net sales Operating income Ordinary income Net income (loss)
Forecast of February 22, 2007 (A) 4,680.0 85.0 25.0 40.0
Forecast of May 15, 2007 (B) 4,650.0 70.0 16.0 9.0
Difference (B-A) -30.0 -15.0 -9.0 -31.0
Change (%) -0.6% -17.6% -36.0% -77.5%

Fiscal year ended March 31, 2006 4,930.0 72.5 15.0 (10.1)

2. Revision of non-consolidated financial results forecast for the full fiscal year ended March 31, 2007 (April 2006 – March 2007)

(In billions of yen)
  Net sales Ordinary income Net income
Forecast of February 22, 2007 (A) 2,230.0 25.0 40.0
Forecast of May 15, 2007 (B) 2,210.0 6.0 5.0
Difference (B-A) -20.0 -19.0 -35.0
Change (%) -0.9% -76.0% -87.5%

Fiscal year ended March 31, 2006 2,370.7 27.5 41.8

II. Background to the revisions

1. Consolidated results

NEC anticipates net sales of 4, 650.0 billion yen, 30.0 billion yen less than the previous forecast of February 22. Despite forecast higher sales in mobile/personal solutions business than previously anticipated, this is mainly due to decreased sales of IT platform products and revenue recognitions of network systems being forwarded to the next fiscal year in the IT/network solutions business, along with a decrease in sales of electronic components of the electron devices business. Despite an anticipated improvement in results of the mobile/personal solutions business due to increased sales, operating income is expected to fall 15.0 billion yen from the previous forecast to 70.0 billion yen, owing mainly to the decrease in sales of IT platform products and network systems in the IT/network solutions business and a downturn in the electron devices business mainly as a result of a decrease in sales of electronic components.
Despite an increase in non-operating income mainly in affiliated companies, NEC expects ordinary income of 16.0 billion yen, 9.0 billion yen less than the previous forecast, owing to a decrease in operating income.
NEC anticipates consolidated net income of 9.0 billion yen, 31.0 billion yen less than the previous forecast, owing to a decrease in ordinary income and the conservative recording of valuation allowance of approximately 23.0 billion yen for deferred tax assets on a non-consolidated basis.

2. Non-consolidated results

NEC anticipates non-consolidated net sales of 2,210.0 billion yen, 20.0 billion yen less than the previous forecast. Despite anticipated higher sales than previously forecast in the mobile terminals business, this is mainly due to decreased sales in IT platform products and revenue recognitions of network systems being forwarded to the next fiscal year in the IT/network solutions business.
NEC expects non-consolidated ordinary income of 6.0 billion yen, 19.0 billion yen less than the previous forecast as a result of a downturn in the IT/network solutions business resulting from a fall in sales of IT platform products and network systems, despite an anticipated improvement in business results of the mobile terminals business due to increased sales.
Non-consolidated net income is now forecast at 5.0 billion yen, a decrease of 35.0 billion yen from the previous forecast, owing to the conservative recording of valuation allowance of approximately 23.0 billion yen for deferred tax assets.

III. Year-end dividend for the fiscal year ended March 31, 2007

NEC expects to pay a year-end dividend of 4 yen per share of common stock for the year ended March 31, 2007 as previously disclosed (an annual dividend of 8 yen per share of common stock, including the interim dividend that has already been paid).

CAUTIONARY STATEMENTS:

This material contains forward-looking statements pertaining to strategies, financial targets, technology, products and services, and business performance of NEC Corporation and its consolidated subsidiaries (collectively "NEC"). Written forward-looking statements may appear in other documents that NEC files with stock exchanges or regulatory authorities, such as the U.S. Securities and Exchange Commission, and in reports to shareholders and other communications. The U.S. Private Securities Litigation Reform Act of 1995 contains, and other applicable laws may contain, a safe-harbor for forward-looking statements, on which NEC relies in making these disclosures. Some of the forward-looking statements can be identified by the use of forward-looking words such as "believes," "expects," "may," "will," "should," "seeks," "intends," "plans," "estimates," "targets," "aims," or "anticipates," or the negative of those words, or other comparable words or phrases. You can also identify forward-looking statements by discussions of strategy, beliefs, plans, targets, or intentions. Forward-looking statements necessarily depend on currently available assumptions, data, or methods that may be incorrect or imprecise and NEC may not be able to realize the results expected by them. You should not place undue reliance on forward-looking statements, which reflect NEC's analysis and expectations only. Forward-looking statements are not guarantees of future performance and involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Among the factors that could cause actual results to differ materially from such statements include (i) global economic conditions and general economic conditions in NEC's markets, (ii) fluctuating demand for, and competitive pricing pressure on, NEC's products and services, (iii) NEC's ability to continue to win acceptance of NEC's products and services in highly competitive markets, (iv) NEC's ability to expand into foreign markets, such as China, (v) regulatory change and uncertainty and potential legal liability relating to NEC's business and operations, (vi) NEC's ability to restructure, or otherwise adjust, its operations to reflect changing market conditions, and (vii) movement of currency exchange rates, particularly the rate between the yen and the U.S. dollar. Any forward-looking statements speak only as of the date on which they are made. New risks and uncertainties come up from time to time, and it is impossible for NEC to predict these events or how they may affect NEC. NEC does not undertake any obligation to update or revise any of the forward-looking statements, whether as a result of new information, future events, or otherwise.

The management targets included in this material are not projections, and do not represent management's current estimates of future performance. Rather, they represent targets that management will strive to achieve through the successful implementation of NEC's business strategies.

Finally, NEC cautions you that the statements made in this material are not an offer of securities for sale. The securities may not be offered or sold in any jurisdiction in which registration is required absent registration or an exemption from registration under the applicable securities laws. For example, any public offering of securities to be made in the United States must be registered under the U.S. Securities Act of 1933 and made by means of an English language prospectus that contains detailed information about NEC and management, as well as NEC's financial statements.

***


NEC Press Contacts

Diane Foley
NEC Corporation
d-foley@ax.jp.nec.com
+81-3-3798-6511
Makoto Miyakawa
NEC Corporation
m-miyakawa@bk.jp.nec.com
+81-3-3798-6511


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