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Home > News Room > NEC Announces Differences between Financial Forecasts and Results for the Fiscal Year Ended March 31, 2011

NEC Announces Differences between Financial Forecasts and Results for the Fiscal Year Ended March 31, 2011


Tokyo, May 10, 2011 - NEC Corporation today announced differences between consolidated financial forecasts announced on February 25, 2011 and results for the fiscal year ended March 31, 2011 (April 1, 2010 to March 31, 2011).

1. Differences between consolidated financial forecasts and results for the fiscal year ended March 31, 2011 (April 1, 2010 to March 31, 2011)

(In billions of yen)

  Sales Operating
income (loss)
Ordinary
income (loss)
Net income (loss)
Previous Forecast (A)
  (announced as of February 25, 2011)
3,200.0 60.0 10.0 0.0
Results (B) 3,115.4 57.8 0.0 -12.5
Difference (B) - (A) -84.6 -2.2 -10.0 -12.5
Change (%) -2.6% -3.6% -99.6% -
(For reference)
Results for the previous fiscal year
(April 2009 – March 2010)
3,583.1 50.9 49.4 11.4

2. Reasons for Differences

Under continuing harsh business conditions, NEC recorded consolidated sales of 3,115.4 billion yen for the fiscal year ended March 31, 2011, 84.6 billion yen less than the previous forecast, due to, among others, the effects from the Great East Japan Earthquake and reduced sales in the Carrier Network business and the IT Services business.

Regarding profitability, deteriorating income caused by reduced sales in the IT Services business, among others, resulted in an operating income of 57.8 billion yen, 2.2 billion yen less than the previous forecast. In terms of ordinary income (loss), NEC recorded an income of 0.04 billion yen, 10.0 billion yen less than the previous forecast, due to the worsening of operating income (loss) and increasing equity in loss of affiliates.

Regarding net income (loss), worsening ordinary income (loss) and the recording of loss on disaster (See Note) resulted in a loss of 12.5 billion yen, 12.5 billion yen worse than the previous forecast.

(Note)

Extraordinary loss of 6.0 billion yen was recorded due mainly to fixed costs during the temporary shutdown period of operation and business, and loss on noncurrent assets and inventory.

Production resumed on March 23 at the NEC production bases mainly impacted by the Great East Japan Earthquake of March 2011, including telecommunications equipment, etc. from NEC Network Products, Ltd. (As of April 1, 2011 the Fukushima City, Fukushima Prefecture based production site company name changed from NEC Wireless Networks, Ltd./ Ichinoseki City, Iwate Prefecture production site company name changed from NEC Tohoku Ltd.), electronic components from NEC Tokin Corporation (Sendai City / Shiroishi City, Miyagi Prefecture) as well as telecommunications equipment and POS technologies from NEC Infrontia Tohoku Corporation (Shiroishi City, Miyagi Prefecture).

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 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 is a registered trademark of NEC Corporation. All Rights Reserved. Other product or service marks mentioned herein are the trademarks of their respective owners. (C)2011 NEC Corporation.


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