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Home > News Room > NEC Announces Financial Forecast Revisions, Business Restructuring Costs and Dividend Forecast Revisions

NEC Announces Financial Forecast Revisions,
Business Restructuring Costs and Dividend Forecast Revisions

*** For immediate use January 26, 2012

Tokyo, January 26, 2012 - NEC Corporation today announced revisions to the consolidated financial forecasts and dividend forecasts announced on October 27, 2011 for the fiscal year ending March 31, 2012 as well as the recording of business restructuring costs.

1. Revised consolidated financial forecasts for the fiscal year ending March 31, 2012
   (April 1, 2011 to March 31, 2012)

(In billions of yen)

  Sales Operating
income (loss)
income (loss)
Net income
Previous Forecast (A)
(announced October 27, 2011)
3,250.0 90.0 55.0 15.0
Revised Forecast (B) 3,100.0 70.0 35.0 -100.0
Difference (B) - (A) -150.0 -20.0 -20.0 -115.0
Change (%) -4.6% -22.2% -36.4% -
FY ended March 31, 2011
3,115.4 57.8 0.0 -12.5

2. Reasons for Financial Forecast Revisions

As challenging business conditions continue, NEC forecasts sales of 3,100.0 billion yen, 150.0 billion yen less than the previous forecast, mainly due to a decrease in sales in the Carrier Network business as a result of investment restraint in international markets, a decrease in sales from a decline in mobile phone shipments in the Personal Solutions business and the impact of flooding in Thailand on the Platform business.

NEC forecasts operating income of 70.0 billion yen, 20.0 billion yen less than the previous forecast, mainly due to loss from decreased sales in the Personal Solutions business and Platform business. NEC also forecasts ordinary income of 35.0 billion yen, 20.0 billion yen less than the previous forecast, mainly due to worsening operating income (loss).

NEC forecasts net loss of 100.0 billion yen, 115.0 billion yen less than the previous forecast, mainly due to worsening ordinary income (loss), business restructuring costs for the reform of cost structure, and an increase in income taxes due to the review of deferred tax assets that reflect tax reform and financial forecasts for this fiscal year.

3. Extraordinary Loss from Business Restructuring Costs

NEC forecasts extraordinary loss of about 40.0 billion yen for the fiscal year ending March 31, 2012, mainly due to business restructuring costs centered on personnel reductions.

4. Dividend Forecast Revision

  Interim Dividend Year-end Dividend Annual Dividend)
Forecast as of October 27, 2011 - Undetermined Undetermined
Revised forecast for FY
ending March 31, 2012
- 0 yen 0 yen
Actual 0 yen - -
FY ended March 31, 2011
0 yen 0 yen 0 yen

5. Reasons for Dividend Forecast Revision

Regrettably, NEC has revised its forecast for year-end dividends for the fiscal year ending March 31, 2012 from undetermined to none, in consideration of the forecast net loss for the fiscal year ending March 31, 2012, and others.


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)2012 NEC Corporation.

NEC Press Contact (Japan)

Akiko Shikimori
NEC Corporation

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