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Home > News Room > NEC Announces Revision of Financial Forecasts and Recording of Extraordinary Loss for the Fiscal Year Ended March 31, 2009

NEC Announces Revision of Financial Forecasts and Recording of Extraordinary Loss for the Fiscal Year Ended March 31, 2009

***For immediate use May 8, 2009

Tokyo, May 8, 2009 - 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.



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 Director of the Kanto Finance Bureau, and in reports to shareholders and other communications. NEC is relying on certain safe-harbors for forward-looking statements 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, (vii) movement of currency exchange rates, particularly the rate between the yen and the U.S. dollar, (viii) the impact of unfavorable conditions or developments, including share price declines, in the equity markets which may result in losses from devaluation of listed securities held by NEC, and (ix) impact of any regulatory action or legal proceeding against NEC. 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. Securities may not be offered or sold in any jurisdiction in which required registration is absent or an exemption from registration under the applicable securities laws is not granted.

NEC Press Contacts:

Kosuke Yamauchi
NEC Corporation

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