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Home > News Room > NEC Announces Financial Forecasts and Results for the First Half

NEC Announces Differences between Financial Forecasts and Results for the First Half, Records Extraordinary Income and Revises Financial Forecasts for the Fiscal Year Ending March 31, 2012


*** For immediate use Oct. 27, 2011

Tokyo, October 27, 2011 - NEC Corporation today announced differences between consolidated financial forecasts announced on July 28, 2011 and results for the first half of the fiscal year ending March 31, 2012 (April 1, 2011 to September 30, 2011) as well as the recording of extraordinary income for the same period.

NEC Corporation also announced revisions to its full-year consolidated financial forecasts announced on July 28, 2011 for the fiscal year ending March 31, 2012 (April 1, 2011 to March 31, 2012).

1. Differences between consolidated financial forecasts and results for the first half of the fiscal year ending March 31, 2012 (April 1, 2011 to September 30, 2011)

(In billions of yen)

  Sales Operating
income (loss)
Ordinary
income (loss)
Net income
(loss)
Previous Forecast (A)
  (announced as of July 28, 2011)
1,490.0 0.0 -20.0 -15.0
Results (B) 1,443.2 6.8 -10.4 -11.0
Difference (B) - (A) -46.8 6.8 9.6 4.0
Change (%) -3.1% - - -
Results for the first half of the fiscal
year ended March 31, 2011
1,469.2 1.1 -22.3 -27.0

2. Reasons for Differences

Under continuing harsh business conditions, NEC recorded consolidated sales of 1,443.2 billion yen for the six months ended September 30, 2011, 46.8 billion yen less than the previous forecast, due to, among others, decreased sales in the Personal Solutions business, the Platform business and the Carrier Network business.

Regarding profitability, reduced costs and the advancement of streamlined costs resulted in an operating income of 6.8 billion yen, 6.8 billion yen more than the previous forecast, despite loss due to reduced sales. In terms of ordinary income (loss), NEC recorded a loss of 10.4 billion yen, 9.6 billion yen better than the previous forecast, due to the improvement of operating income (loss).

Regarding net income (loss), the improvement of ordinary income (loss) resulted in a loss of 11.0 billion yen, 4.0 billion yen better than the previous forecast.

3. Extraordinary Income

Extraordinary Income of 15.6 billion yen was recorded in the first half of the consolidated fiscal year ending March 31, 2012, mainly from the gain on sales of subsidiaries and affiliates' stocks (mainly assignment of NEC Personal Computers, Ltd. shares) totaling 15.0 billion yen.

4. Revision of the Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2012

(In billions of yen)

  Sales Operating
income (loss)
Ordinary
income (loss)
Net income
(loss)
Previous Forecast (A)
(announced as of July 28, 2011)
3,300.0 90.0 55.0 15.0
Revised Forecast (B) 3,250.0 90.0 55.0 15.0
Difference (B) - (A) -50.0 - - -
Change (%) -1.5% - - -
Results for the fiscal year ended
March 31, 2011
3,115.4 57.8 0.0 -12.5

5. Reasons for Revision of the Consolidated Financial Forecast

Sales of 3,250.0 billion yen are forecast for the fiscal year ending March 31, 2012. This is 50.0 billion yen less than previously forecast due to a decline in sales in the Personal Solutions business, the Platform business and the Carrier Network business.

There is no change to the financial forecasts for operating income (loss), ordinary income (loss) or net income (loss) for the fiscal year ending March 31, 2012, mainly due to reduced costs and streamlined costs.

***


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.

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NEC Press Contact (Japan)

Akiko Shikimori
NEC Corporation
+81-3-3798-6511
E-Mail:a-shikimori@ay.jp.nec.com

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