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NEC Electronics Revises Full-Year Forecasts
KAWASAKI, Japan, October 25, 2006
NEC Electronics Corporation (TSE: 6723) today revised its full-year consolidated financial forecasts disclosed on April 25, 2006.
1. Revised forecasts for full-year consolidated financial results
(For the year ending March 31, 2007)
In millions of yen
|
|
Net Sales
|
Operating Income
(Loss)
|
Income (Loss) Before
Income Taxes
|
Net Income (Loss)
|
|
Previous forecasts
|
705,000
|
5,000
|
0
|
(5,000)
|
|
Revised forecasts
|
695,000
|
(7,000)
|
(19,000)
|
(25,000)
|
|
Increase (decrease)
|
(10,000)
|
(12,000)
|
(19,000)
|
(20,000)
|
|
Percent change
|
(1.4)
|
---
|
---
|
---
|
|
Reference: results for the year ended March 31, 2006
|
645,963
|
(35,689)
|
(42,386)
|
(98,198)
|
|
Reference: Results for the six months ended September 30, 2006
In billions of yen
|
Net Sales |
Operating Income
(Loss) |
Income (Loss) Before
Income Taxes |
Net Income (Loss) |
Forecasts for the six months ended September 30, 2006
(April 25, 2006) |
345.0 |
(5.0) |
(7.0) |
(9.0) |
Results for the six months ended September 30, 2006
(October 25, 2006) |
343.0 |
(6.9) |
(5.6) |
(7.4) |
Increase (decrease) |
(1.9) |
(1.9) |
1.4 |
1.6 |
|
Reference: Forecasts for the six months ending March 31, 2007
In billions of yen
|
Net Sales |
Operating Income
(Loss) |
Income (Loss) Before
Income Taxes |
Net Income (Loss) |
Previous forecasts
(April 25, 2006) |
360 |
10.0 |
7.0 |
4.0 |
Revised forecasts
(October 25, 2006) |
Approx. 350 |
0 |
Approx. (13.4) |
Approx. (17.6) |
Increase (decrease) |
Approx. (10.0) |
Approx. (10.0) |
Approx. (20.0) |
Approx. (22.0) |
|
|
2. Background to the revisions
Despite a projected 4 percent increase in semiconductor sales in the second half of the fiscal year compared to the first half, the company has reduced its sales forecast by 10.0 billion yen from the previous forecast announced at the start of the fiscal year due to decreasing demand for chips targeting mobile handsets and digital consumer electronics.
As sales are not expected to meet the previous forecast, while R&D costs are expected to exceed the initial estimates, and changes in the sales mix slowed improvements to profitability, the forecast for operating income had to be reduced by 10.0 billion yen. The company also expects to record an additional 5.0 billion yen for reforms in the second half of the fiscal year, which will affect income before income taxes and net income.
At the outset of the fiscal year, NEC Electronics' goal was to bring operating income for the year to the black. Although financial performance in the first half of the fiscal year was in line with recovery plans, as a result of the aforementioned factors, the company determined that is would be difficult to ensure a positive operating income for the year, and has revised its financial forecasts accordingly.
The consolidated financial forecasts were calculated at the rate of 115 yen per USD, and 145 yen per Euro.
Cautionary statements: |
1) |
The statements in the material above with respect to the plans, strategies and forecasts of NEC Electronics Corporation ("NEC Electronics") are forward-looking statements involving risks and uncertainties. We caution you in advance that actual results could differ materially from such forward-looking statements due to several factors. |
2) |
The consolidated financial statements of NEC Electronics are prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, but the figures for operating income shown above represent net sales minus the cost of sales, research and development, and selling, general and administrative expenses. |
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About NEC Electronics
NEC Electronics Corporation (TSE: 6723) specializes in semiconductor products encompassing advanced technology solutions for the high-end computing and broadband networking markets, system solutions for the mobile handsets, PC peripherals, automotive and digital consumer markets, and multi-market solutions for a wide range of customer applications. NEC Electronics Corporation has 26 subsidiaries worldwide including NEC Electronics America, Inc. (www.am.necel.com) and NEC Electronics (Europe) GmbH (www.eu.necel.com). For additional information about NEC Electronics worldwide, visit www.necel.com.
Information in the press releases, including product prices and specifications is current on the date of the press announcement, but is subject to change without prior notice.
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