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NEC Electronics Revises Full-Year Forecasts


KAWASAKI, Japan, February 22, 2007

NNEC Electronics Corporation (TSE: 6723) today revised its full-year consolidated financial forecasts for the fiscal year ending March 31, 2007, previously disclosed on October 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

695,000

(7,000)

(19,000)

(25,000)

Revised forecasts

690,000

(30,000)

(39,000)

(45,000)

Increase (decrease)

(5,000)

(23,000)

(20,000)

(20,000)

Percent change

(0.7)

(328.6)

(105.3)

(80.0)

Reference: results for the year ended March 31, 2006

645,963

(35,689)

(42,386)

(98,198)

2. Background to the revisions


Consolidated net sales are expected to total 690 billion yen, representing a decline from the previous forecast. Of this figure, semiconductor sales are expected to total 660 billion yen, approximately 8 billion yen less than the previous forecast, due to decreasing demand for LCD drivers ICs and chips for PC peripherals in the fourth quarter.


The company expects to record operating losses of 30 billion yen, 23 billion yen worse than the previous forecast. The revised figure includes an additional 13 billion yen loss from ordinary operating activities, such as a decline in semiconductor sales and lower fab utilization rates due to manufacturing adjustments; an additional 10 billion yen will be incurred for the consolidation of some projects in development, as well as reevaluation of assets, designed to improve the company's future financial condition.


Losses before income taxes are expected to total 39 billion yen, 20 billion yen worse than the previous forecast. The increase in losses before income taxes is estimated to be less than the increase in operating losses. In the previous forecast, the company estimated approximately 6 billion yen for restructuring costs; although these restructuring costs are expected to be in line with the previous forecast, the company anticipates that other expenses will be less than previously forecast.


Of the estimated 39 billion yen in losses before income taxes this fiscal year, approximately 16 billion yen is expected to be attributed to structural reforms and improvements.


Net losses are expected to widen by 20 billion yen from the previous forecast as a result of an increase in losses before income taxes.


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.


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 25 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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